Medical Device Maker to Pay $13m in False Claims Case

An Oregon-based medical device manufacturer has agreed to pay a multimillion-dollar settlement related to serious healthcare fraud allegations.

Berlin-headquartered Biotronik, which produces technologies for patients suffering from cardiovascular and endovascular diseases, will pay $12.95m to settle allegations that it violated the False Claims Act.

The Department of Justice (DoJ) alleged that the firm paid certain physicians to use its pacemakers, defibrillators and other cardiac devices, resulting in false claims being made to the state-run Medicare and Medicaid programs.

One way it was accused of doing so was via a new employee training program. According to the DoJ, Biotronik paid physicians for an “excessive number of trainings” and sometimes for “training events that either never occurred or were of little or no value to trainees.”

Another scheme alleged by the DoJ involved payments for “holiday parties, winery tours, lavish meals with no legitimate business purpose and international business class airfare,” which were directed to physicians. On other occasions, doctors were paid for making brief appearances at international conferences, the DoJ said.

A Federal Anti-Kickback Statute prohibits any party from paying to “induce referrals of items or services” covered by Medicare and other federal healthcare programs. In so doing, it’s designed to ensure that medical judgement is not compromised by financial inducements.

“Paying kickbacks to doctors to influence their selection of medical devices undermines the integrity of federal healthcare programs,” said principal deputy assistant attorney general Brian Boynton, head of the Justice Department’s Civil Division.

“When medical devices are used in surgical procedures, patients deserve to know that their device was selected based on quality-of-care considerations and not on improper payments from manufacturers.”

The States of Arizona, California, Illinois, Missouri and Nevada will receive a total of approximately $933,400 from the settlement with Biotronik.

Healthcare fraud surged during the first year of the pandemic, with US authorities opening a record number of investigations.