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Orthofix Agrees to $34 Million False Claims Settlement

Article-Orthofix Agrees to $34 Million False Claims Settlement

After seeing its former sales vice-president convicted on federal charges in April for signing up a surgeon in New York to a “consulting” agreement to induce him to prescribe the company’s bone growth stimulators, Orthofix in June agreed to pay the U.S. government $34 million to settle False Claims Act charges relating to the devices’ marketing. The company also agreed to plead guilty to a felony federal audit obstruction charge, and pay a $7.8 million criminal fine, according to a Justice Department release.

A whistleblower lawsuit alleged that Orthofix misstated the devices’ true cost which “resulted in overpayments by federal programs; paid kickbacks to physicians and their staffs in the form of ‘fitter fees,’ referral fees and other comparable fees, to induce the use of Orthofix products; caused the submission of falsified certificates of medical necessity; and failed to advise patients of their right to rent rather than purchase Orthofix products,” according to the government. The Justice Department noted that five Orthofix employees had previously pleaded guilty to criminal charges in connection with this matter.

As part of the settlement, Orthofix also agreed to enter into a corporate integrity agreement with HHS Office of Inspector General.

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