Minnesota-Based Medtronic Inc. Pays U.S. $23.5 Million to Settle Claims That Company Paid Kickbacks to Physicians
U.S. Department of Justice December 12, 2011

Office of Public Affairs (202) 514-2007/TDD (202) 514-1888

WASHINGTON—Medtronic Inc. of Fridley, Minn., has agreed to pay the United States $23.5 million to resolve allegations that it violated the False Claim Act by using physician payments related to post-market studies and device registries as kickbacks to induce doctors to implant the company’s pacemakers and defibrillators, the Justice Department announced today.

Post-market studies are intended to assess the clinical performance of a medical device or drug after that device or drug has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients.

The United States contends that Medtronic caused false claims to be submitted to Medicare and Medicaid by using two post-market studies and two device registries as vehicles to pay participating physicians illegal kickbacks to induce them to implant Medtronic pacemakers and defibrillators. Although Medtronic collected data and information from participating physicians, each of the studies and registries required a new or previous implant of a Medtronic device in each patient, and in each case Medtronic paid participating physicians a fee ranging from approximately $1,000 to $2,000 per patient. The United States contends that Medtronic solicited physicians for the studies and registries in order to convert their business from a competitor’s product and/or persuade the physicians to continue using Medtronic products.

“Patients who rely on their healthcare providers to implant vital medical devices expect that those decisions will be made with the patients’ best interests in mind,” said Tony West, Assistant Attorney General for the Civil Division. “Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers.”

“Medicare and Medicaid beneficiaries depend on their physicians to make decisions based on sound medical judgment, especially when they are choosing which pacemaker or defibrillator to implant,” said B. Todd Jones, U.S. Attorney for the District of Minnesota. “Medical device manufacturers must not be permitted to use improper payments to cloud that judgment.”

“Today’s settlement highlights one of the key purposes of the Anti-Kickback law—to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by unlawful payments,” said Benjamin Wagner, U.S. Attorney for Eastern District of California.

“Patients trust that decisions to implant certain pacemakers or other medical devices are based on their own health interests and not influenced by kickbacks,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “Companies distorting medical decision-making through kickbacks can expect that OIG investigators and our law enforcement partners will actively investigate and prosecute such unlawful conduct.”

The settlement resolves allegations contained in two whistleblower lawsuits filed under the qui tam provisions of the False Claims Act that are pending in Minnesota and California, respectively. As part of today’s resolution, the whistleblowers will receive payments totaling more than $3.96 million from the federal share of the recovery.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are more than $8.5 billion.

This settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota, the U.S. Attorney’s Office for the Eastern District of California, the Office of Inspector General at the U.S. Department of Health and Human Services, and the FBI.

Click here to see and review the top 10 most wanted fugitives for Health Care Fraud

I tell you the dead are not safe from Identity theft. Read the following FBI press release.

Doctor Pleads Guilty to Billing Medicare and Medicaid for Counseling Sessions with Dead Patients
Dr. Williams Claimed $2 Million in Phony Health Treatments, Saying It Was Group Therapy
U.S. Attorney’s Office June 06, 2011

Northern District of Georgia (404) 581-6000

ATLANTA—ROBERT WILLIAMS, 72, of Atlanta, Georgia, pleaded guilty today in federal district court on two counts of health care fraud as part of a scheme to bill for group psychological therapy that WILLIAMS never provided.

United States Attorney Sally Quillian Yates said, “With so many elderly citizens and others who need specialized psychological care, this defendant ignored his duty as a doctor and became a billing machine who claimed to treat patients who were in fact dead. This blatant attempt to rip off the system took funds and care away from real live patients with real problems. Medicare and Medicaid need all the money they can get for legitimate patient care and this physician will get none of that money.”

“This case sends a strong message that Medicare and Medicaid fraud will not be tolerated in Georgia,” said Georgia Attorney General Sam Olens. “At a time when our state budget is heavily strained, every dollar intended for the needy must reach the recipient. We will continue to work with our partners, the U.S. Attorney’s Office, and the FBI, to weed out fraud in Georgia.”

Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, said, “Dr. Williams had for years, enjoyed a position of trust within the medical and health provider industry. He chose to abandon that trust and instead displayed a level of greed that will not be tolerated. Medicare fraud should be promptly reported to the nearest FBI field office so that the much needed federal health care benefits will be there for those individuals who truly need them.”

According to United States Attorney Yates, the charges, and other information presented in court: WILLIAMS was a licensed physician, practicing in the Atlanta area. From approximately July 2007 through October 2009, he contracted with a medical services company to provide group psychological therapy to nursing home patients in a variety of nursing homes. Under his signature, thousands of claims were submitted to Medicare and Georgia Medicaid seeking reimbursement for group psychological therapy that WILLIAMS purportedly provided to beneficiaries at several nursing homes in the Atlanta area. In many instances, however, WILLIAMS did not actually provide the therapy.

Specifically, from July 2007 through October 2009, Medicare claims data indicated that over 55,000 claims were submitted using WILLIAMS’ provider number for group psychological therapy. Those claims sought reimbursement for over $2,000,000, and ultimately caused Medicare to reimburse WILLIAMS over $750,000. For the same time period, over 40,000 Medicaid claims were submitted by WILLIAMS for group psychological therapy, causing Georgia Medicaid to pay out over $225,000.

An investigation of WILLIAMS’ claims showed that, in many cases, he sought payment for services provided to beneficiaries who were deceased at the time he purportedly rendered the care. In two cases, the patient died over a year before he was allegedly seen by WILLIAMS in the nursing home. Numerous claims were submitted to Medicare and Medicaid for group psychological therapy when the beneficiary was hospitalized at the time of service and, consequently, could not have received care at the nursing home as represented.

WILLIAMS was indicted on February 22, 2011 on 10 counts of health care fraud. Today WILLIAMS pleaded guilty to two of those counts. He could receive a maximum sentence of 10 years in prison and a fine of up to $250,000 for each count. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Sentencing has been scheduled for August 23, 2011, at 11:30 a.m. before United States District Judge Richard W. Story.

This case is being investigated by special agents of the Federal Bureau of Investigation and the Georgia Medicaid Fraud Control Unit.

Assistant United States Attorneys Kurt R. Erskine and Nick Oldham, and Senior Assistant Attorney General Nancy Alstrom from the Georgia Medicaid Fraud Control Unit, are prosecuting the case.

For further information, please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.