Biotronik to Pay Millions to Settle Kickback Claims

Cardiac device maker Biotronik Inc. will pay $4.9 million to the U.S. government to settle a lawsuit alleging that the company paid kickbacks to induce physicians to use its devices.

The Berlin, Germany-based company, which has U.S. headquarters in Lake Oswego, OR, admitted to no wrongdoing in the settlement.

"When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients," said acting assistant attorney general Joyce R. Branda for the Justice Department's Civil Division in a government statement.

The settlement stems from a whistleblower complaint filed by former Biotronik employee Brian Sant. The government alleged that the company paid for electrophysiologists' and cardiologists' meals at expensive restaurants, and inflated payments for membership on a physician advisory board. The alleged kickbacks induced Nevada and Arizona hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for converting to or continuing to use Biotronik pacemakers, defibrillators and cardiac resynchronization therapy devices, the justice department said.

The federal government used the False Claims Act to take over the whistleblower lawsuit and pursue  some of Sant's allegations, the statement said. Sant will receive approximately $840,000 of the federal settlement.

The New York Times published a report in 2011 about the sudden surge in the use of Biotronik's  pacemakers and defibrillators in Las Vegas, displacing devices made by major cardiac implant manufacturers Medtronic, St. Jude Medical, and Boston Scientific. The federal investigation was already underway, the story said.

The Biotronik settlement is among the latest multimillion-dollar agreements by medical device makers to resolve government allegations of kickbacks to physicians. In May 2014, Medtronic agreed to pay $9.9 million to the Justice Department for allegedly giving clinicians gifts -including alcoholic beverages and tickets to sporting events, plus paid visits to strip clubs - to convince them to implant its defibrillators and pacemakers in patients who did not necessarily need them. Medtronic (Fridley, MN) did not admit to wrongdoing in the lawsuit, which referenced events spanning from 2001 to 2009.

In 2012, Biomet (Warsaw, IN) entered into a deferred prosecution agreement with the justice department over what prosecutors described as $1.5 million in improper payments made to health providers in Argentina, Brazil and China from 2000 to 2008.

The company paid a $17.28 million criminal penalty, and made a $5.4 million payment to the U.S. Securities and Exchange Commission.

Nancy Crotti is a contributor to Qmed and MPMN.

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