On January 20, 2023, the U.S. Department of Justice (DOJ) announced that DePuy Synthes, Inc., a Johnson & Johnson subsidiary, agreed to pay $9.75 million to settle allegations it, through former sales representatives, improperly paid kickbacks to a surgeon in violation of the Anti-Kickback Statute (AKS) and False Claims Act (FCA). The settlement resolves federal and state claims.
The AKS prohibits offering, paying, receiving, or soliciting remuneration in exchange for any item or service paid in whole or in part by federal health care programs. Many states, like Massachusetts, have laws that or are similar to federal AKS and FCA laws. According to the DOJ, “the AKS is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.” Claims submitted to Medicare and Medicaid in violation of the AKS may also be false claims and may be actionable under federal and state FCA laws, which the government alleged against DePuy.
According to the government, between July 2013 and February 2018, DePuy’s then-employees gave a surgeon DePuy’s surgical implants and instruments for at least twenty surgeries performed abroad. The equipment included cages, rods, screws, plates, and a modular access and retraction system, according to the settlement agreement. The government explained that no person or company, in the United States or abroad, paid for the medical equipment provided to the surgeon. The government also noted that DePuy did not track products provided to the surgeon nor did it seek payment for the products, despite the fact the equipment was valued at more than $100,000. While the surgeries performed abroad were not for federal health care beneficiaries, the government contends that DePuy provided the surgeon free equipment “to induce him to use DePuy’s products in spine surgeries he performed on Medicare and Medicaid patients in Massachusetts or to reward his usage of DePuy products in such surgeries in violation of the Anti-Kickback Statute.”
The lawsuit was filed in 2017 in the US District Court for the District of Massachusetts under the qui tam provisions of the FCA. The qui tam provisions to provide financial incentives and a procedural structure to whistleblowers – or relators – so individuals could bring false claims act cases on behalf of the government. The financial incentive can be significant, as whistleblowers are entitled to 15% to 30% of the money the government recovers, based on several factors. According to the settlement agreement, the relator will receive at least $1,374,460.36 from the federal government and at least $478,039 from Massachusetts for reporting the conduct.
The qui tam case is United States et al. ex rel. John Doe v. Johnson & Johnson, et al., No. 17-cv-11502 (D. Mass.).
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to health care fraud and False Claims Act litigation. If you need assistance with such a matter, please contact us today.