The AARP calls Medicare’s coverage of medical devices “a boon to beneficiaries but also a big draw for fraudsters, who exploit older Americans’ health care concerns to enrich themselves.” This week’s Modern Healthcare offers a piece that argues a recent False Claims Act case involving medical device kickbacks to doctors “illustrates an increasingly tenuous arrangement that may spur more whistleblower cases.” The piece also appeared Crain’s Chicago Business.
The story refers to a July case where the FBI, the Department of Health and Services and the Department of Justice joined in the whistleblower suit against spinal implant company called Life Spine. The feds charge that the company paid doctors to use their devices. The kickbacks included “millions of dollars of consulting fees, royalties, and intellectual property.”
In a release on the case, Manhattan U.S. Attorney Geoffrey S. Berman said: “Kickbacks to doctors can alter or compromise their judgment about the medical care and services to provide to patients,and can increase healthcare costs. This office will continue to hold companies and the people who run them accountable when they make improper payments to doctors.”
Life Spine tells Modern Healthcare in a statement “that both parties are engaged in discussions and look forward to resolving the matter.”
More from the story:
Life Spine is one of a wave of cases that reinforced that an anti-kickback violation can also be an FCA violation, said Adam Tarosky, partner in Nixon Peabody’s government investigations and white collar defense practice.
“That is a big area where the definition of fraud has been broadened,” the former DOJ attorney who worked FCA cases said, adding that was set in motion by a provision of the Affordable Care Act…
Regulators and the general public have more access to payment data, which has invited more scrutiny. Companies paid physicians and teaching hospitals $9.35 billion in 2018 in general payments such as consulting fees, gifts, grants, and travel and lodging; research; and ownership and investment interest in companies, according to CMS’ Open Payments data.
In April, 24 people were indicted what the Department of Justice called a $1.2 billion scam that involved telemedicine and medical devices. According to the DOJ, doctors were paid to prescribe devices without interacting with the patient or after a brief phone call.
While medical tests are not devices, they too can be a source of kickbacks fraud. On Tuesday, three doctors and one medical practice entered into settlements with the DOJ “to resolve allegations that they referred patients for genetic testing in exchange for kickbacks from a Seattle-area testing company,” according to a release.
- International Consortium of Investigative Journalism series on regulation and device safety: Is the industry “unnecessarily putting millions of patients at risk of serious harm in its quest for profit?” November 2018
- Orange County Register: Whistleblowers upset that DOJ won’t investigate possibly counterfeit implanted devices that continue to hurt patients. July 2019
- CBS Whistleblower: Billion Dollar Back Surgery Scam. June 2019