Medical Device Manufacturer Pays $34 Million to Settle FCA Allegations

Orthofix, Inc., a Texas-based medical device manufacturer, agreed to pay the United States $34 million to settle allegations under the False Claims Act.  The allegations are related to the company’s sale of bone growth stimulator devices.

The qui tam lawsuit filed by Jeffrey Bierman alleged that Orthofix improperly waived patient co-payments, resulting in overpayments by federal programs, paid kickbacks to physicians and their staffs to induce the use of Orthofix products, caused the submission of falsified certificates of medical necessity, and failed to advise patients of their right to rent rather than purchase the products.

Orthofix also agreed to plead guilty to a felony of obstruction of a federal audit and to pay a $7.7 million criminal fine. The criminal charges involve the company’s failure to disclose information concerning its practices regarding certificates of medical necessity during a June 2008 Medicare audit. Five employees had previously pleaded guilty to related criminal charges.

Posted in Anti-Kickback Statute, SettlementsNo Comments

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