Enforcement against medical device companies is not new and yet, these companies continue to engage in schemes that land them in hot water. Frequently the same schemes are repeated over and over- some form of payment by the device company to a physician who selects/recommends the device to patients. In some cases, the payment is in the form of an honorarium for speaking engagements. In others, the payment is an all-expense paid travel to attend device company-sponsored “CME” in exotic locations or consulting fees for assisting in the evaluation and design of the device.
Announced yesterday by the U.S. Department of Justice (DOJ), is the settlement of allegations against Florida-based Arthrex Inc., a medical device company that specializes in orthopedic products. Under the settlement agreement, Arthrex will pay $16 million for allegedly paying kickbacks to an orthopedic surgeon (Dr. Peter Millett) in Colorado. The “payment” in this case was structured as royalty payments purportedly to compensate the orthopedic surgeon for his “contributions” to the development of two of Arthrex’s products when in fact the “payment” was intended to induce the surgeon’s recommendation/selection of the Arthrex products. By offering the payments to the surgeon with the intent to induce purchase of Arthrex’ products which were then billed to Medicare, Arthrex violated the Anti-Kickback Statute (AKS) as well as the False Claims Act.Continue reading