California-based medical device maker NuVasive Inc. agreed to pay the United States $13.5 million to resolve allegations that it paid kickbacks to induce doctors to use the company’s spinal fusion system.
The settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act by Kevin Ryan, a former NuVasive sales representative.
Ryan will receive about $2.2 million from the settlement, the DOJ said.
The False Claims Act allows private parties to file suit on behalf of the United States and share in the the government’s recovery. The DOJ can take over the suit, as it did in this case.
Between 2008 and 2013, the DOJ alleged, NuVasive promoted the use of a spine-fusion system called CoRoent for surgical applications not approved or cleared by the FDA.
The DOJ said “NuVasive caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement.”
The settlement also resolved allegations that NuVasive paid kickbacks to doctors so they would use the CoRoent System in spine fusion surgeries.
The allegedly illegal payments consisted of promotional speaker fees, honoraria, and expenses relating to physicians’ attendance at events sponsored by a professional group organized, funded, and operated by NuVasive, “despite its outward appearance of independence.”
The federal Anti-Kickback Statute bans incentive payments to doctors for procedures reimbursed by Medicare and Medicaid.
U.S. Attorney Rod J. Rosenstein of the District of Maryland said: “A medical device manufacturer violates the law if it knowingly causes physicians to use its products for purposes that are not medically reasonable and necessary and to bill federal health insurance programs.”
Since January 2009, the Justice Department has recovered more than $24.8 billion through False Claims Act cases, with more than $15.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The federal share of the NuVasive civil settlement was about $12.6 million and the state Medicaid share was just over $900,000.
The claims resolved by the settlement were allegations only, and there has been no determination of liability, the DOJ said.
The lawsuit was United States ex rel. Kevin Ryan v. NuVasive, Inc. (D. Md.).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.