The third-largest medical device company in the world has agreed to pay $4 million to settle two separate lawsuits stemming from allegations tied to overbilling and off-label promotion of a neurostimulation product.
On Friday, Medtronic agreed to pay the United States $2.8 million to resolve allegations that it had physicians submit false claims for a procedure called "SubQ stimulation," according to a release from the U.S. Department of Justice. Between 2007 and 2011, the DOJ alleged that Medtronic had physicians submit claims to Medicare and TRICARE for the investigational procedure that had not been approved by the FDA that utilizes Medtronic's spinal cord stimulation devices. The claims were originally filed by whistleblower Jason Nickell, who formerly worked as a Medtronic sales representative. Medtronic denied any wrongdoing as part of the settlement.
In a separate case, EV3 Inc., a subsidiary of Medtronic, settled with the DOJ for $1.25 million to settle false claims for unnecessary inpatient admissions related to minimally-invasive atherectomy procedures, according to a DOJ release.
The charges date back to 2006, when investigators allege that a company called Fox Hollow was advising hospitals to bill atherectomy procedures using the company's Silver Hawk Plague Excision System as inpatient claims as opposed to less-expensive outpatient claims. Fox Hollow was bought by EV3 in 2007, which was then acquired by Covidien in 2010. Last month, Medtronic bought Covidien in a $49.9 billion deal. The lawsuit was originally filed by Amanda Cashi, who worked as a Fox Hollow sales representative.
It's not the first time that Medtronic has been snared in high profile false claims lawsuits, and these most recent settlements certainly aren't the largest. Last May, Medtronic paid $9.9 million to settle whistleblower claims that the company paid kickback to doctors to implant pacemakers and defibrillators, and in 2011, Medtronic paid the U.S. government $23.5 million to resolve similar kickback allegations.