French medical device manufacturer Medicrea International and its American affiliate Medicrea USA have agreed to pay $2 million to settle alleged kickbacks to physicians and other Medicare Open Payments program violations.
The company agreed to pay $1 million to the U.S. and participating states to resolve civil whistleblower allegations that the company violated the Anti-Kickback Statute and the False Claims Act and similar state statutes, according to a U.S. Dept. of Justice news release. Medicrea will pay an additional $1 million to the U.S. to resolve allegations that the companies violated the Physician Open Payments Program by “failing to fully report those physician-entertainment expenses to the Centers for Medicare and Medicaid,” the DOJ said.
The Anti-Kickback Statute prohibits medical device companies from directly or indirectly paying anything of value to induce the referral of items or services covered by federal healthcare programs. Medicrea is settling allegations that it provided value items in the form of meals, alcoholic beverages, entertainment and travel expenses to U.S.-based physicians at events for the Scoliosis Research Society’s Congress in Lyon, France in September 2013, according to federal prosecutors. The government alleged that Medicrea provided the benefits so that physicians would buy the company’s spinal devices, resulting in false payment claims to federal healthcare programs.
Medicrea’s other $1 million settlement resolves its liability on CMS’s Open Payments Program, which was created to provide more transparency and protection to consumers by requiring medical device manufacturers and others to disclose payments to physicians, according to the DOJ.
“Kickbacks undermine the integrity of federal healthcare programs and increase costs to taxpayers,” acting U.S. Attorney Jennifer Arbittier Williams said in a news release. “This case demonstrates the Department of Justice’s commitment to ensuring that medical device manufacturers do not use improper relationships to influence physician decision-making and are transparent about the benefits that they provide to physicians.”
The settlements come after the Senate Finance Committee requested in March 2019 that the Office of the Inspector General at HHS and CMS investigate Open Payments Program non-compliance.
The civil settlements also resolve claims brought under the whistleblower provisions of the False Claims Act statute, which allows private parties to file an action on behalf of the U.S. and receive a portion of any recovery.
The original False Claims Act suit was filed in the Eastern District of Pennsylvania.
Medtronic acquired Medicrea in November 2020.
“Medtronic is committed to the highest standards of ethical conduct and compliance with all applicable laws and regulations in the locations where we operate,” a Medtronic spokesperson told MassDevice in an email. “We are pleased that Medicrea resolved this historical matter prior to the acquisition.”