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January 31, 2024

In the fourth-largest Controlled Substances Act (CSA) settlement in history, e-commerce company eBay has agreed to pay $59 million for its failure to properly regulate the sales of pill presses and encapsulating machines on its website.  Such devices can be used to produce pills that mimic pills produced by legitimate pharmaceutical companies.  To combat this, the CSA requires that purchasers of such devices have their identities verified, recorded, and reported to the DEA; however, eBay failed to do so.  DOJ

December 21, 2023

A Florida woman who submitted over $192 million in claims to Medicare for medically unnecessary and unprovided tests, equipment, and services, has been sentenced to 20 years in prison.  Elizabeth Hernandez ordered thousands of genetic testing and orthotic braces for patients she never spoke to or examined, ultimately ordering more cancer genetic tests than any other provider in the nation.  She also billed for thousands of telemedicine visits that she never performed, often billing for over 24 hours in a single day.  DOJ

December 18, 2023

Heart monitoring device manufacturer BioTelemetry Inc. and its subsidiary, LifeWatch Services Inc., have agreed to pay more than $14.7 million for causing false claims to be submitted to federal healthcare programs.  The claims were brought in two separate qui tam suits, one by an employee of one of LifeWatch’s customers, Michael Pelletier, and the other by SFP I LLC.  The whistleblowers alleged that the companies knew the design of their enrollment portal would steer clinical staff into enrolling patients in telemetry, which is reimbursed at a higher rate, rather than holter monitoring and event monitoring, which is reimbursed at a lower rate.  DOJ

May 11, 2023

Dutch medical supplier Koninklijke Philips N.V. has agreed to pay $62 million to settle charges that it violated the Foreign Corrupt Practices Act while selling medical equipment to hospitals in China.  A SEC investigation found that Philips’ Chinese subsidiaries gave distributors special pricing discounts that invited excessive funds to be used for improper payments, made such payments to curry favor toward their products, and manipulated the fair bidding process to fake compliance with Chinese laws.  The SEC had previously charged Philips for similar conduct in Poland between 1999 and 2007.  SEC

April 20, 2023

Matthew Taylor Witkowski will spend 60 months in prison for generating and purchasing fraudulent written orders for DME, and then, using his Dominican Republic-based business, marketed and sold those orders to pharmacies and DME suppliers. Witkowski’s fraud resulted in more than $8 million in false claims reimbursements being made by Medicare. Witkowski will forfeit over $4 million and pay restitution of over $8 million to Medicare. SDNY

April 20, 2023

Miami doctors Lawrence Alexander and Dean Zusmer were sentenced to 33 months and 96 months in prison, respectively, for their scheme to defraud Medicare of $31 million. Zusmer, a chiropractor and DME company owner, paid kickbacks to acquire patient referrals and signed doctors’ orders, using overseas call centers to solicit unnecessary prescriptions from patients and telemedicine companies. Alexander, an orthopedic surgeon and co-owner of another DME company, concealed his participation by putting the DME company in the name of one of his family members. The companies received over $15 million from Medicare through their fraud. DOJ

February 13, 2023

Spacelabs Healthcare, LLC has agreed to pay $2.5 million to settle claims of violating the False Claims Act by overcharging the Department of Veteran Affairs and Department of Defense between 2014 and 2019.  According to a qui tam suit filed by two former Spacelabs employees, Marci Gebhardt and Christopher Kelley, the company agreed to contract clauses in which they would sell patient monitoring equipment to the government at lower rates.  However, Spacelabs then failed to comply when billing the VA and Defense Logistics Agency.  For their role in bringing a successful enforcement action, Gebhardt and Kelley will share in a $437,500 reward.  DOJ

January 20, 2023

DePuy Synthes, Inc., a subsidiary of Johnson & Johnson that manufactures medical devices, has agreed to pay $9.75 million to resolve allegations of defrauding Medicare and Medicaid.  According to former sales representative Aleksej Gusakovs, DePuy gave a Massachusetts-based orthopedic surgeon thousands of dollars’ worth of free implants and instruments for use in overseas surgeries.  The illegal kickbacks induced the surgeon to use DePuy products in surgeries performed in the United States, and caused false claims to be submitted to Medicare and the Massachusetts Medicaid program.  As the whistleblower in a successful qui tam action, Gusakovs will receive a $1.37 million share of the settlement.  DOJ

December 20, 2022

Cochlear implant manufacturer Advanced Bionics LLC paid $11.4 million to resolve claims brought in a whistleblower action that the company falsely stated that the radio-frequency (RF) emissions generated by some of its cochlear implant processors met international standards when it submitted pre-market approval applications to the FDA.  The company allegedly knew that the devices did not meet standards, and manipulated testing conditions to obtain passing test results.  Whistleblower David Nyberg, a former engineer at Advanced Bionics, will receive a qui tam award of $1.9 million from the federal amount of the settlement.  DOJ; USAO ED PA

December 12, 2022

Medical device manufacturer Coloplast will pay $14.5 million to resolve claims that in its contracts with the Department of Veteran’s Affairs the company overcharged the government and submitted false claims.  Coloplast self-disclosed to the government that in violation of the Trade Agreements Act it misreported country of origin and sold products from non-designated countries, and, in violation of applicable Price Reduction Clauses, failed to provide the government with required discounts.  USAO DC
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