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December 15, 2011

Medtronic settles kickback allegations

The Commercial Appeal

MEMPHIS, Tenn. — Medtronic has reached a $23.5 million settlement with the Department of Justice to settle allegations that the company paid kickbacks to doctors to use its heart products.

The government said the company, whose spinal and biologics group is based in Memphis and employs 1,500 people, caused false claims to be submitted to Medicare and Medicaid by using two post-market studies and two device registries as vehicles to pay the physicians to implant its devices.

The studies required a new or previous implant of a Medtronic device in each patient while the company collected data from the doctors, the DOJ said. The company paid them a fee of about $1,000 to $2,000 per patient.

The government said Medtronic solicited selected physicians and paid them the fees to convert their business from a competitor's product or to persuade them to continue to use Medtronic products.

"Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers," said Tony West, assistant attorney general for the Justice Department's Civil Division.

The settlement resolves two whistleblower suits filed under the False Claims Act pending in California and Minnesota. The settlement will pay the whistleblowers more than $3.96 million.

Dr. Marshall Stanton, vice president of clinical research and reimbursement for Medtronic's cardiac and vascular group, said the company "is happy to have this investigation behind us."

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