A Biomet subsidiary has agreed to pay $6.07 million to resolve allegations that it violated the False Claims Act by paying kickbacks to encourage use of its bone growth stimulators and by billing federal health care programs for refurbished stimulators, the Department of Justice announced Wednesday.
EBI LLC, doing business as Biomet Spine and Bone Healing Technologies and Biomet Inc., is a Parsippany, N.J.-based company that sells bone growth stimulators used to repair fractures that are slow to heal.
“Medical device companies must not use improper financial incentives to influence the decision to use their products,” said August Flentje, acting deputy assistant attorney general of the Justice Department’s Civil Division, in the department’s announcement. “This settlement demonstrates the department’s commitment to protect patients, and the taxpayers who fund their care, by ensuring that medical decisions are based on the patients’ medical needs rather than the financial interests of others.”
The Justice Department alleged that, from 2001 to 2008, EBI paid staff at doctors’ offices to influence doctors to order its bone growth stimulators. These payments were allegedly provided pursuant to personal service agreements with staff members.
The department concluded that these payments violated the Anti-Kickback Act and resulted in false billings to federal health care programs, including Medicare. The settlement also resolves EBI’s disclosure that it received federal reimbursements for bone growth stimulators that had been refurbished, according to the announcement.
The settlement resolves in part an allegation filed in a lawsuit by Yu Yue, a former product manager for EBI, in federal court in New Jersey under the whistle blower provisions of the False Claims Act. The provision allows private individuals to sue on behalf of the government for false claims and to share in any recovery; Yu’s share has not yet been determined, the announcement states.
Since January 2009, the Justice Department has recovered a total of more than $23 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs, according to the announcement.
(Story By The Times Union)
