The U.S. Department of Justice announced on October 29, 2020 that Minnesota-based medical device maker Medtronic USA Inc. (“Medtronic”) has agreed to pay $8.1 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce a South Dakota neurosurgeon to use certain Medtronic products. Medtronic also agreed to pay an additional $1.11 million to resolve allegations that it violated the Open Payments Program by failing to accurately report payments it made to the neurosurgeon to the Centers for Medicare & Medicaid Services (CMS).
The government alleged that Medtronic agreed to the requests of South Dakota neurosurgeon, Wilson Asfora, M.D., to pay for social events at Carnaval Brazilian Grill, a restaurant Medtronic knew Asfora owned, including scores of expensive meals. Medtronic allegedly made the payments to benefit Asfora and induce him to use Medtronic’s SynchroMed II intrathecal infusion pumps, which are implantable devices used to deliver medication to patients. The government alleged that Medtronic’s sponsored events at Asfora’s restaurant were social gatherings for which Asfora selected and invited his social acquaintances, business partners, favored colleagues, and potential and existing referral sources, while Medtronic paid for their meals and drinks. Over a nine-year period, Medtronic allegedly paid for more than one hundred events at Asfora’s restaurant.
The Anti-Kickback Statute prohibits directly or indirectly offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, TRICARE, and other federal healthcare programs. The settlement also resolves Medtronic’s liability under CMS’ Open Payments Program, which was established by the Affordable Care Act and requires medical device manufacturers like Medtronic to disclose to CMS certain payments or other transfers of value to a physician like Asfora. The government alleged that Medtronic made payments to Asfora’s restaurant at his request, knowing that Asfora owned the restaurant, but underreported those payments to CMS.
Asfora and two of his other companies are defendants in a separate False Claims Act lawsuit in which the United States filed a complaint in November 2019 alleging that Asfora received kickbacks to use certain implants in his spinal surgeries. United States ex rel. Bechtold, et al. v. Asfora, et al., No. 4:16-cv-04115-LLP (D.S.D.).
The U.S. Attorney for the District of South Dakota stated with regard to the settlement, “We expect doctors to make medical decisions based on what is best for their patients, not what is best for their bank accounts. The quality of medical care is eroded – and patients and their families suffer – when companies and physicians enter into these sorts of under the table schemes to create illegal financial incentives to increase the use of medical devices.”
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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