U.S. to Pursue False Claims Act Kickback Suit Against Pacemaker Manufacturer

Last week, the United States Department of Justice announced that it would intervene in a False Claims Act suit against St. Jude Medical, Inc., alleging that the manufacturer of pacemakers and other heart devices participated in an illegal kickback scheme resulting in the submission of false claims for reimbursement to the government.  The U.S. had previously declined to intervene in December 2009, but now, after reviewing additional documents and interviewing more witnesses, believes it has “good cause to intervene.”

The suit against St. Jude Medical was filed by Charles Donigan, who worked as a technical service specialist for the company from 2004 until 2007.  Donigan’s suit alleged that St. Jude Medical paid kickbacks to doctors, hospitals and other healthcare providers to induce them to prescribe its products.  The providers then submitted claims for reimbursement to Medicare and other federal programs in violation of the False Claims Act, according to Donigan.  The suit also alleges that St. Jude violated a separate anti-kickback law by providing “sham fees” for phony clinical studies, and by providing doctors and their spouses with various lobbyist-like perks, such as vacations, tickets to sporting events, and “educational” programs at luxury resorts.

The government’s decision to intervene comes on the heels of a June settlement with St. Jude in a separate False Claims Act suit, under which the company agreed to pay $3.7 million to settle allegations that it paid illegal kickbacks to Kentucky and Ohio hospitals. 

For more information see:  http://www.reuters.com/article/idUSTRE6755E820100806?type=domesticNews