Anti-Kickback and Stark

October 29, 2020

Medtronic has agreed to pay over $9.2 million to resolve allegations of violating the False Claims Act and CMS’s Open Payments Program by paying kickbacks to a South Dakota-based neurosurgeon, Wilson Asfora, M.D., in order to induce sales of its SynchroMed II implantable intrathecal infusion pumps.  According to the government, Medtronic allegedly sponsored nine years’ worth of events at a restaurant owned by Asfora, and to which Asfora would invite his acquaintances, business partners, trusted colleagues, and referral sources.  For his role in the kickback scheme, Asfora has been named in a separate FCA lawsuit, which the United States joined last November.  USAO SD

October 14, 2020

Medical device maker Merit Medical Systems Inc. will pay $18 million to resolve claims first brought by a whistleblower under the False Claims Act that the company paid unlawful kickbacks to doctors and hospitals to induce them to use MMSI’s EmboSphere and QuadraSphere devices for embolization procedures.  MMSI was alleged to have offered hospitals and providers with millions of dollars in free advertising assistance, “educational” grants, and other services based on the providers’ past sales and to induce future sales.  The whistleblower, Charles J. Wolf, M.D., who will receive $2.65 million, was the Chief Compliance Officer for the company; according to DOJ, he repeatedly warned MMSI that its practices violated the Anti-Kickback Statue.  DOJ; USAO NJ; NC AG

October 2, 2020

Pharmatech, Inc. and its CEO and founder Tuan Pham will pay over $3 million to settle allegations in a case initiated as a qui tam action under the False Claims Act.  The government alleged that defendants violated the Anti-Kickback Statute by paying a medical clinic, Imperial Valley Wellness, a per-specimen fee to induce it to refer orders for laboratory drug-testing to Phamatech which were subsequently billed to Medicare.  Many of the tests were also alleged to be not medically necessary. The whistleblower, former Pharmatech employee John Polanco, will receive over $500,000 from the settlement.  USAO SD Cal.

October 2, 2020

Advanced Pain Management Holdings, Inc. and its subsidiaries will pay $1 million to resolve claims brought by a whistleblower under the False Claims Act.  Defendants, which run ambulatory surgical centers, were alleged to have violated the Anti-Kickback Statute by improperly gifting incentive stock shares to non-employee physicians allegedly as a reward for past and anticipated referrals to APMH facilities, and by paying those physicians “medical director” fees tied to the volume of procedures at APMH facilities, without proper documentation of the agreement.  In addition, defendants were alleged to have performed unnecessary confirmatory urine drug testing on patients.  USAO ED WI

Mid Dakota Clinic – Medicare Fraud/ASC Kickbacks ($5.45M)

The Constantine Cannon team represented Jeffery Neuberger, the former CEO of a medical group in North Dakota, in a 2017 False Claims Act case alleging a scheme in violation of the Anti-Kickback Statute (AKS) between the medical group and its wholly owned ambulatory surgery center (ASC).  The AKS is intended to prevent abuses (such as unnecessary treatments) that can occur when a doctor makes money from referring patients for goods or services.  The ASC safe-harbor to the AKS is limited; it essentially permits ASC ownership only by surgeons who perform procedures or surgeries in the ASC as a functional extension of his or her office.  The lawsuit alleges that all of the multi-practice physician owners profited from referrals, not only the surgeons, and that they refused to give up this lucrative income stream despite knowing that it violated the AKS.  In November 2019, Mid Dakota Clinic, its affiliated building partnership, and insurer agreed to pay the United States $4.15 million to resolve the case.  The clinic additionally paid $1.3 million for the whistleblower’s attorneys’ fees and costs, for a total payment of $5.45 million.  The United States awarded Mr. Neuberger a 25% relator’s share of its recovery.

September 28, 2020

Lakeway Regional Medical Center, LLC will pay $1,119,177 to resolve allegations that the hospital submitted false claims to the Medicare and Medicaid programs in the form of claims for payment for services that were based on referrals from doctors offered investment in a joint venture to purchase and then lease the hospital back to LRMC.  The government alleged that such an arrangement was unlawful under the Anti-Kickback Statute.  The case was initiated by a qui tam complaint filed by Dr. Robert Van Boven and Sharon Van Boven.  USAO WD TX

September 23, 2020

Gilead Sciences, Inc. has agreed to pay $97 million to resolve claims of paying kickbacks to Medicare beneficiaries in connection with its pulmonary arterial hypertension drug, Letairis.  From 2007 to 2010, Gilead enticed beneficiaries to purchase Letairis by allegedly referring the beneficiaries to a foundation, Caring Voice Coalition (CVC), and then making payments to CVC to cover patient copays of Letairis specifically, in violation of the Anti-Kickback Statute and Medicare rules.  Additionally, Gilead routinely obtained data from CVC that it used to inform future payments, including how many CVC clients were on Letairis, how much CVC spent on those clients, and how much CVC expected to spend on them in the future.  DOJ; USAO MA

September 22, 2020

New Jersey biotechnology company Bio-Reference Laboratories, Inc., will pay $11.5 million to resolve two actions brought by whistleblowers alleging that defendant violated the Anti-Kickback statute by paying unlawful remuneration to physicians based on the volume of those doctors’ referrals to defendant.  The remuneration took the form of payments for a percentage of the cost of electronic medical records software used by the doctors.  In addition, defendant was alleged to have unlawfully billed Medicare and Tricare for testing performed on hospital inpatients, instead of billing the hospitals themselves.  USAO SDNY