On January 13, 2023, the Department of Justice announced a settlement with DePuy Synthes Inc for $9.75 million. The settlement concerns allegations that DePuy, a medical device manufacturer, paid kickbacks to a Massachusetts orthopedic surgeon to induce him to use its surgical devices and give services referrals.
The settlement resolves allegations that DePuy violated the Anti-Kickback Statute (AKS) and caused the submission of false or fraudulent claims to Medicare. The government alleged that DePuy provided the orthopedic surgeon with free spinal implants and tools for overseas surgeries, inducing that surgeon to use DePuy products in surgeries performed in the United States.
Under the False Claims Act (FCA), the Anti-Kickback Statute forbids the payment or solicitation of remunerations for items or services covered by federally funded programs, like Medicare and Medicaid. According to the Special Agent in Charge Phillip M. Coyne of HHS Office of Inspector General, “When such healthcare companies provide illegal kickbacks to boost profits, their actions erode public confidence in the health care system, can compromise the patient-physician relationship, and waste government health program funding.”
Of the $9.75 million to be paid by DePuy, approximately $7.23 million will return to the federal government. Approximately $2.52 million will return to Massachusetts, which jointly funded claims for surgeries involving DePuy devices that the surgeon submitted to the Massachusetts Medicaid program.
The False Claims Act is the most important tool for uncovering fraud. Whistleblower disclosures trigger many fraud cases filed by the government. The FCA whistleblower, or qui tam, provisions allow private citizens to file lawsuits alleging false claims on behalf of the government. If the government prevails in a qui tam lawsuit, the whistleblower can receive between 15 and 30 percent of the monies recovered. A whistleblower and former sales representative of DePuy, Aleksej Gusakow, filed this lawsuit. Gusakow is entitled to $1.75 million for providing essential insider information that aided the government in stopping Medicaid fraud.
DePuy Synthes, Inc. Agrees to Pay $9.75 Million to Settle Allegations Concerning Kickbacks Paid to Massachusetts Orthopedic Surgeon