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Florida Business, Whistleblower, & Securities Lawyers / Blog / Qui Tam/Whistleblower / Medical Company Agrees to Settle Whistleblower’s Case

Medical Company Agrees to Settle Whistleblower’s Case

According to the Justice Department, medical device manufacturer Medtronic, Inc. has agreed to settle a whistleblower’s qui tam case alleging it violated the False Claims Act by promoting a medical procedure that had not been approved by the Food and Drug Administration. The Justice Department said the allegations involved claims made to Medicare and TRICARE (the government health care program for military members and their dependents).

According to its website, Minnesota-based Medtronic employs over 85,000 people in more than 140 countries. It lists its core technologies as 1) electrical stimulation; 2) implantable structural devices; 3) targeted drug and biologics delivery; 4) powered and advanced energy instruments; 5) surgical navigation and imaging; and 6) patient and device management.

According to the Minnesota Star Tribune, a former Medtronic salesperson, Jason Nickell, filed a whistleblower complaint under the qui tam provisions of the False Claims Act concerning the way the company was promoting its neuromodulation devices to physicians and hospitals. Specifically, the whistleblower alleged that the company paid doctors in 20 different states tens of thousands of dollars to induce medical providers to use its devices for an off-label use that had not been approved as safe and effect by the Food and Drug Administration. The off-label use involved an investigational procedure known as subcutaneous peripheral nerve field stimulation (“Sub-Q stimulation”). In Sub-Q stimulation, a spinal cord stimulation device is placed just beneath the patient’s skin near an area of pain. Electronic pulses produced by the device create a tingling sensation intended to reduce chronic pain.

According to the whistleblower, Medtronic sales staff was directed to promote Medtronic’s devices for Sub-Q stimulation use by selling devices to pain management physicians at steep discounts and promising the doctors that they could make $10,000 profit on each patient. Allegedly, hospitals were instructed to submit bills to Medicare using a billing code assigned to the FDA-approved use in order to get reimbursement for the off-label use.

The Justice Department announced that Medtronic will pay $2.8 million to resolve the allegations. Medtronic has not admitted any liability. The whistleblower will receive approximately $600,000 of the settlement proceeds as his reward under the qui tam provisions of the False Claims Act.

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