Catch of the Week: Colorado Neurosurgeon and His Three Companies Settle Spinal Implant Kickback Claims for $2.35M
This edition of our Catch of the Week series features the successful resolution of a whistleblower suit against neurosurgeon Dr. William Choi and three companies he owned. The defendants agreed to pay the United States $2.35 million to resolve allegations that, for over five years, Dr. Choi received illegal kickbacks from spinal implant device distributors for devices he used in surgeries. The kickbacks rendered false the claims defendants submitted to publicly funded healthcare programs including Medicare, Medicaid, and TRICARE in violation of the False Claims Act (“FCA”).
Dr. Choi created and secretly maintained control of spinal equipment distributorships Nexus Spine, LLC and 4D Spine, LLC to provide implant equipment like rods, screws, and cages. The distributorships sold equipment to Sky Ridge Medical Center, Castle Rock Adventist and Porter Adventist hospitals for use in surgeries Dr. Choi performed. Physician-owned distributorship schemes are concerning because they allow surgeons to “choose the most profitable products from distributorships they controlled and pass the bills to taxpayers,” explained Curt L. Muller, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.
Whistleblower Mark Rahe previously worked for Dr. Choi’s practice and brought his inside knowledge of the kickback scheme to the United States. Rahe reported the fraud and initiated the lawsuit on the Government’s behalf under the FCA’s qui tam provisions. The FCA’s reward provision entitles successful whistleblowers to share in the government’s recovery, an incentive for private citizens like Rahe to help the government learn of otherwise difficult to detect fraud on taxpayers.
“When doctors receive kickbacks, those kickbacks undermine patient trust in our healthcare system, and they also drive up medical costs,” United States Attorney Jason Dunn said in a February 12, 2020 press release issued by the Justice Department. “It is important for patients to know that when a doctor chooses equipment for a surgery, that decision is being made solely on that patient’s best interest, and is not impacted in any way by someone paying a kickback. And it is important for doctors to know that if they get illegal kickbacks, they face serious penalties.”