Medical device manufacturer NuVasive Inc. has agreed to pay $13.5 million to resolve allegations that it marketed its CoRoent System for surgical uses not approved by the Food and Drug Administration, leading health care providers to submit false claims to Medicare and other federal health care programs for spine surgeries, the Justice Department said.
The settlement also resolves allegations that the California-based company caused false claims by paying kickbacks to induce physicians to use the company’s CoRoent System
“The Justice Department is committed to holding medical device manufacturers accountable, which includes requiring that they follow all laws designed to ensure that medical devices are safe and effective,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division in a press release July 30.
“It is also imperative that manufacturers not improperly influence the selection of medical devices in order to ensure that these decisions are based on the needs and interests of patients, not on a physician’s own financial interests,” he added.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Kevin Ryan, a former NuVasive sales representative. The act permits private parties to file suit on behalf of the US for false claims and obtain a portion of the government’s recovery.
As part of the resolution, Ryan will receive approximately $2.2 million, the DOJ said.
The goverment alleged that between 2008 and 2013, NuVasive promoted the use of the CoRoent System for unapproved surgical treatments of two complex spine deformities: severe scoliosis and severe spondylolisthesis. Physicians and hospitals then submitted false claims to federal health care programs for surgeries that were not eligible for reimbursement.
The settlement agreement also resolves allegations that NuVasive knowingly offered and paid illegal remuneration to certain physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute.
The illegal remuneration consisted of promotional speaker fees, honoraria and expenses relating to physicians’ attendance at events sponsored by a group known as the Society of Lateral Access Surgery. SOLAS was allegedly created, funded and operated by NuVasive, despite its outward appearance of independence.
“Defrauding Medicare and Medicaid by paying kickbacks to physicians and promoting uses not covered by Federal health care programs will not be tolerated,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Settlements such as the one entered into today by NuVasive send a message to the medical device industry that such practices will be closely monitored.”
The DOJ said the settlement marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, begun in 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $24.8 billion through False Claims Act cases, with more than $15.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The federal share of the civil settlement is $12,583,413.84, and the state Medicaid share of the civil settlement is $916,586.16.
