The lawsuit names SpineFrontier (Malden, Mass.) and consulting firm Impartial Medical Experts (IME) as well as executives of both companies in the alleged scheme, which the government says took place from at least March 2013 through December 2018. Their alleged actions violated the federal anti-kickback statute, causing federal health care programs to pay millions of dollars in false claims, the government said.
Prosecutors also announced they had settled civil health care fraud claims against five physicians, each of whom admitted to seeking and obtaining kickbacks from SpineFrontier, via IME, for consulting work he did not perform. Each physician also admitted that SpineFrontier, CEO Kingsley Chin, or CFO Aditya Humad specifically instructed him to bill “consulting” hours to SpineFrontier for each surgery in which he used a SpineFrontier device, regardless of whether he spent any time actually consulting, according to a government news release. The complaint alleges that:
- SpineFrontier paid physicians kickbacks through IME, which operates only with a Florida post office box, and whose sole employee is Chin’s wife, Vanessa Dudley.
- The defendants told surgeons that they could bill SpineFrontier and IME for “consulting” on a per-surgical case basis, regardless of the time, if any, the surgeons spent consulting.
- SpineFrontier and IME allegedly set no limit on the number of times a surgeon could purportedly evaluate a SpineFrontier device, leading to numerous instances in which SpineFrontier paid the same physician for submitting consulting hours on the same SpineFrontier device over and over again.
- SpineFrontier made no effort to catalogue, review, or assess feedback that surgeon-consultants provided.
The alleged kickbacks generated more than $100 million in revenue, with the vast majority of SpineFrontier’s total domestic sales revenues coming from kickback-tainted surgeries, according to the U.S. Attorney’s office.
Prosecutors listed the physicians and their settlements as:
- Dr. F. Paul DeGenova, an orthopedic spine surgeon in Ohio, $486,985.
- Dr. Michael Murray, an orthopedic spine surgeon in New York employed by the Department of Veteran Affairs, $330,668.
- Dr. Joseph Shehadi, a neurosurgeon in Ohio, $323,419.
- Dr. Agha Khan, a neurosurgeon in Maryland, $310,843.
- Dr. John Atwater, an orthopedic surgeon who has worked in in Florida and Illinois, $105,149.
Each of the five settling surgeons cooperated with the government’s investigation into the defendants, according to prosecutors, who said they took that cooperation into account in these settlements.
In connection with the filing of its complaint, the government intervened in two private whistleblower lawsuits that had been filed under seal pursuant to the False Claims Act. The cases are United States ex rel. Birchall v. SpineFrontier, Inc. et al., No. 15-cv-12877 and United States ex rel. Miller & Bennett v. SpineFrontier, Inc. et al., No. 15-cv-12908.
“Medical device companies that pay surgeons kickbacks, directly or indirectly, corrupt the market, damage the health care system and jeopardize patient health and safety,” said U.S. attorney Andrew E. Lelling in the release. “We will pursue aggressively any organization or individual who fails to play by the rules.”
“Kickbacks undermine the integrity of federal health care programs and can result in unnecessary or harmful medical care,” added assistant attorney general Jody Hunt of the Department of Justice’s Civil Division. “The Department of Justice will pursue unlawful kickback arrangements in whatever form they occur to ensure the integrity of the medical care received by federal program beneficiaries.”