Medline Settles Kickback Case for $85M

Former Medline Industries, Inc. employee turned whistleblower, Sean Mason, will receive $23.4 million of the $85 million Medline will pay to settle Mason’s lawsuit alleging false claims act violations. Mason’s complaint accuses Medline, an Illinois medical products company, of inducing medical providers such as HCA, Inc. and HealthSouth Corp., with fraudulent kickbacks in the form of “rebates”, excessive gifts, and donations, to get there business in return.

The medical providers identified in the complaint use federal funds provided by Medicare and Medicaid to purchase supplies from the defendant, and therefore kickbacks to these companies is in violation of the federal False Claims Act.  Medline’s general counsel denies the allegations, claiming the settlement was made solely to avoid costly litigation. Ironically, the federal government also lacked faith in the whistleblower’s complaint, having determined not to intervene in the matter. Mason’s legal counsel, Milberg LLP, claim this settlement is one of the largest ever awarded a whistleblower alleging violations of the False Claims Act, for which the government did not intervene.

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