Medical Device Maker Merit Medical To Pay $18 Million To Settle Allegations Of Improper Payments To Physicians
Seattle Whistleblower Attorneys report that medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, has agreed to pay $18 million to resolve allegations that the company caused the submission of false claims to the Medicare, Medicaid, and TRICARE programs by paying kickbacks to physicians and hospitals to induce the use of MMSI products.
The settlement resolves allegations that, for over six years, MMSI engaged in a kickback scheme to pay physicians, medical practices, and hospitals to induce their use of MMSI products in medical procedures performed on Medicare, Medicaid, and TRICARE beneficiaries. Under the guise of an internal program known as the Local Advertising Program, MMSI allegedly provided remuneration to healthcare providers in the form of millions of dollars in free advertising assistance, practice development, practice support, and purported unrestricted “educational” grants to induce the healthcare providers to purchase and use a wide variety of MMSI products. These products included MMSI’s EmboSphere devices, which generally were used for uterine fibroid embolization procedures, and its QuadraSphere devices, which generally were used for other types of embolization procedures. Despite publicly claiming that its financial assistance was designed to “increase the awareness” of medical treatments, MMSI allegedly provided it only to select healthcare providers to reward past sales, induce future sales, and steer business to MMSI and away from MMSI’s competitors. The government alleged that MMSI disregarded numerous warnings that its conduct may violate the Anti-Kickback Statute, including warnings from MMSI’s own Chief Compliance Officer, during the course of the alleged kickback scheme. Of the $18 million to be paid by MMSI, $15.21 million will be returned to the federal government, and a total of $2.79 million will be returned to individual states, which jointly funded claims involving MMSI devices that were submitted to state Medicaid programs.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Charles J. Wolf, M.D., the former Chief Compliance Officer of MMSI. The act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Dr. Wolf will receive $2.65 million from the federal share of the settlement.
The lawsuit is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Source: Dept. of Justice
The settlement resolves allegations that, for over six years, MMSI engaged in a kickback scheme to pay physicians, medical practices, and hospitals to induce their use of MMSI products in medical procedures performed on Medicare, Medicaid, and TRICARE beneficiaries. Under the guise of an internal program known as the Local Advertising Program, MMSI allegedly provided remuneration to healthcare providers in the form of millions of dollars in free advertising assistance, practice development, practice support, and purported unrestricted “educational” grants to induce the healthcare providers to purchase and use a wide variety of MMSI products. These products included MMSI’s EmboSphere devices, which generally were used for uterine fibroid embolization procedures, and its QuadraSphere devices, which generally were used for other types of embolization procedures. Despite publicly claiming that its financial assistance was designed to “increase the awareness” of medical treatments, MMSI allegedly provided it only to select healthcare providers to reward past sales, induce future sales, and steer business to MMSI and away from MMSI’s competitors. The government alleged that MMSI disregarded numerous warnings that its conduct may violate the Anti-Kickback Statute, including warnings from MMSI’s own Chief Compliance Officer, during the course of the alleged kickback scheme. Of the $18 million to be paid by MMSI, $15.21 million will be returned to the federal government, and a total of $2.79 million will be returned to individual states, which jointly funded claims involving MMSI devices that were submitted to state Medicaid programs.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Charles J. Wolf, M.D., the former Chief Compliance Officer of MMSI. The act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Dr. Wolf will receive $2.65 million from the federal share of the settlement.
The lawsuit is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc., No. 2:16-cv-01855-CCC-MF (D.N.J.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Source: Dept. of Justice