Biotronik today agreed to pay a $12.95 million settlement with the U.S. Justice Dept. (DOJ) to resolve allegations that it violated the False Claims Act.
DOJ alleged that the cardiac device maker violated the False Claims Act by causing the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce their use of Biotronik’s implantable cardiac devices, such as pacemakers and defibrillators.
Allegations included overuse of paid consultants on behalf of itself and highly regarded physician partners, according to a Biotroink news release. The company said that the parties — the company, DOJ, the U.S. Attorney’s Office for the Central District of California, and the U.S. Department of Health and Human Services (HHS) — have agreed that the settlement is not an admission of liability.
“The company is pleased to put this investigation behind us so we can continue in our mission to deliver innovative solutions that save and improve patient lives every day,” Biotronik President Ryan Walters said. “Our guiding principle, ‘Excellence for Life,’ is reflected in everything we do, including continuous enhancements to our culture of compliance. Acting responsibly with our customer and physician partners is paramount.”
A separate DOJ news release said that Biotronik allegedly abused a new employee training program by paying physicians for an excessive number of trainings and — in some cases — for training events that either never occurred or were of little or no value to trainees.
Biotronik allegedly made these payments despite concerns raised by its own compliance department, which warned that salespeople had “too much influence” in selecting physicians to conduct new employee training and that the training payments were being over-utilized.
The settlement also resolves allegations that Biotronik paid for physicians’ holiday parties, winery tours and lavish meals with no legitimate business purpose, as well as international business class airfare and honoraria in exchange for making brief appearances at international conferences. These allegations would mean Biotronik violated the Anti-Kickback Statute.
As a result of the settlement, Arizona, California, Illinois, Missouri and Nevada paid for a portion of Medicaid claims at issue and will receive a total of approximately $933,400.
The civil settlement includes the resolution of claims brought under the qui tam (whistleblower) provisions of the False Claims Act by Jeffrey Bell and Andrew Schmid, both of whom were previously employed as independent sales representatives for Biotronik. Bell and Schmid will receive approximately $2.1 million as their share of the recovery in this case.
“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 M. 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.”