There have been many qui tam settlements involving medical device fraud. Whistleblowers have filed against medical device companies for a variety of different types of fraud. These medical device qui tam cases have been brought under the False Claims Act by
- sales representatives,
- marketing personnel,
- medical staff, and
If a whistleblower seeking to report medical device fraud also knows that state Medicaid money is involved, a qui tam can also be brought under State False Claims Acts.
Medical Device Fraud: Unapproved Medical Devices
One type of medical device fraud case is selling unapproved devices. In 2014, a qui tam case was brought against a medical device company for selling unapproved devices. This case against OtisMed Corporation (device company) alleged that the company distributed medical devices after being rejected for market clearance by the FDA. The qui tam case settled for $40 million.
Another example of a case brought by a whistleblower seeking to report medical device fraud settled in 2015. This qui tam case was brought against Genzyme (a biotechnology subsidiary of a foreign pharmaceutical company). The qui tam case alleged the company unlawfully distributed an adulterated medical device. The medical device qui tam case settled for $55 million.
Finally, another medical device fraud case against Quest Diagnostics and Nichols Institute Diagnostics settled in 2009. The qui tam case resolved criminal and civil claims concerning types of diagnostic test kits that were manufactured, marketed, and sold to labs. Furthermore, the medical device fraud complaint alleged that the tests kits were adulterated. The whistleblower case settled for $302 million
Medical Device Fraud: Anti-Kickback Statute
Other types of medical device fraud qui tams involve the Kickback statute. A qui tam case alleged that Orthofix (a medical device company) paid kickbacks to surgeons in exchange for using its products. In particular, the company allegedly paid spinal surgeons to use its products by employing sham consulting and royalty agreements. The company also used fake research grants and travel and entertainment as inducements. The medical device fraud violated the kickback statute and the case settled in 2012 for $30 million.
Another example of a medical device fraud qui tam case settled in 2016 for $646 million. The qui tam case alleged that Olympus Corporation (global medical equipment company) paid kickbacks to physicians and hospitals to win new business and reward sales of its endoscopes and other surgical equipment.
Report Medical Device Fraud Using the CIFPA
If an individual is seeking to report medical device fraud by filing a qui tam case related to Medicare/Medicaid, then the whistleblower’s lawyer should also investigate if private insurance companies were defrauded by the same conduct. in sum, ff private insurance companies are also defrauded, the whistleblower might have a case under the California Insurance Fraud Prevention Act or CIFPA. Examples of cases brought under the CIFPA to report medical device fraud can be instructive.
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