The federal Anti-Kickback Statute (AKS), at its core, prohibits offering, paying, soliciting, or receiving any remuneration in exchange for federal healthcare program referrals.  AKS violations carry potential criminal penalties, as well as civil and administrative consequences, including monetary penalties and possible exclusion from federal healthcare programs.  Submitting claims to a federal healthcare program that are tainted by a violation of the AKS may also amount to false claims under the federal False Claims Act (FCA).  Despite the ongoing COVID-19 pandemic, in the last six months, the federal government has obtained numerous multimillion-dollar settlements from individuals and business related to alleged AKS violations:

$2 Million Settlement.  On August 21, 2020, the U.S. Department of Justice (DOJ)  issued a press release announcing that Ghanshyam Bhambhani, a former Queens cardiologist, agreed to settle alleged AKS violations.  Dr. Bhambhani allegedly paid physicians for referrals and allegedly submitted false claims to government health care programs.  Specifically, between 2010 and 2017, Dr. Bhambhani allegedly provided referring doctors compensation disguised as rent in violation of the AKS and the FCA. 

$18 Million Settlement.   In July 2020, Merit Medical Systems (Merit), a medical device manufacturer, agreed to settle a lawsuit brought under the whistleblower (qui tam) provisions of the FCA by its former chief compliance officer who alleged AKS violations.  Merit allegedly used fraudulent advertising, inflated writing and speaking fees, extravagant trips, exorbitant consulting fees, and other tactics to encourage physicians to use its devices.  Merit’s CEO, Fred Lampropoulos, cited the “mounting costs and time demands associated with the investigation” as one reason for the settlement.  Merit also denied all allegations in the lawsuit.

$729 Million Settlement.  On July 2, 2020, Chilivis Grubman attorneys wrote about the $729 million settlement by Novartis Pharmaceuticals Corporation (Novartis).  In a July 1, 2020, the DOJ alleged that Novartis used charitable foundations to pay the copays for patients who otherwise could not afford Novartis’ drugs.  The scheme functioned as a kickback scheme, according to the government.  To resolve these allegations, Novartis agreed to pay $51.25 million.  The DOJ also alleged that Novartis spent hundreds of millions of dollars on bribes under the guise of speaker programs or sham educational events.  To resolve these allegations, Novartis agreed to pay $591.4 million.  Novartis will also pay $48.1 million to resolve state Medicaid claims and forfeit more than $38.4 million under the Civil Asset Forfeiture Statute.

$347 Million Settlement.  On June 25, 2020, the DOJ issued a press release announcing that Novartis AG and subsidiaries agreed to settle $233 million in criminal penalties for alleged Foreign Corrupt Practices Act violations.  Assistant Attorney General Brian A. Benczkowski of the DOJ’s Criminal Division alleged that “Novartis AG’s subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes.”  The purported scheme occurred in Greece. 

$1.75 Million Settlement.  On April 24, 2020, the DOJ announced that Dr. Jeffrey R. Carlson agreed to pay $1.75 million to settle allegations of AKS violations.  Dr. Carlson allegedly accepted kickbacks from SpineFrontier, a medical device manufacturer, in the form of consulting fees he submitted through Impartial Medical Experts, an alleged sham company. 

$1.5 Million Settlement.  On March 5, 2020, the DOJ issued a press release announcing that five doctors admitted to accepting kickbacks from SpineFrontier.  Similar to Dr. Carlson, all five doctors allegedly received kickbacks in the form of consulting fees through a sham third-party company, Impartial Medical Experts.  All but one provider agreed to pay more than $300,000.  The five individual settlements totaled over $1.5 million.

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations, both criminal and civil, and False Claims Act litigation.  If you need assistance with such a matter, please contact us today.