Medtronic Agrees to $9.9 Million Settlement in Physician Kickback Case

Medtronic Infuse Bone Graft SettlementThe Justice Department announced yesterday that Medtronic Inc. has agreed to pay the United States $9.9 million to resolve allegations that the company made illegal payments to physicians to induce them to implant Medtronic pacemakers and defibrillators.

Assistant Attorney General Stuart F. Delery of the Civil Division said such “[i]mproper financial incentives have the potential to compromise physician medical judgment.” He said the Justice Department is committed to pursuing medical device manufacturers that use “improper financial relationships” to influence physicians’ treatment decisions.

The United States case alleged that Medtronic “caused false claims to be submitted to Medicare and Medicaid” through the use of illegal kickbacks to induce physicians to implant Medtronic pacemakers and defibrillators. These inducements included paying physicians to speak at events intended to increase referral business; developing marketing/business development plans for physicians at no charge; and providing tickets to sporting events. The Justice Dept. alleged that the Minnesota medical device maker engaged in these practices to sway doctors to continue implanting Medtronic devices or to switch to Medtronic devices from other manufacturer’s products.

In the Justice Department’s news release, Benjamin Wagner, U.S. Attorney for the Eastern District of California said, “These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”

The settlement stems from a whistleblower complaint filed under the False Claims Act by Adolfo Schroeder, a former Medtronic employee, according to the Justice Department’s news release. The settlement involved a coordinated effort by the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Eastern District of California; and the Office of Inspector General of the U.S. Department of Health and Human Services (HHS).



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