Boston Scientific Settles False Claims Act Suit for $30 Million

October 28, 2013 — Our nation’s Medicare program is besieged every year with false claims filed by doctors, hospitals, pharmacies, drug manufacturers and medical device makers. To redress the problem, the U.S. Department of Justice depends on tips from conscientious informants. The federal False Claims Act includes qui tam provisions that allow health care insiders to fight fraud themselves by filing a whistleblower lawsuit on behalf of the government. To reward whistleblowers who are brave enough to step forward, the Act permits tipsters to share the funds the government recoups.

Guidant Resolves Whistleblower Allegations of False Claims to Medicare for Defective Heart Devices

Boston Scientific Corp. and three of its subsidiaries, Guidant LLC, Cardiac Pacemakers Inc. and Guidant Sales LLC (collectively, Guidant), will spend $30 million to resolve whistleblower allegations of Medicare fraud. The suit alleges Guidant knowingly sold defective cardiac defibrillators to health care providers who implanted the dangerous devices into Medicare patients. Boston Scientific acquired Guidant in 2006.

Guidant is the manufacturer of implantable defibrillators, designed to help patients at risk for a heart attack caused by an irregular heartbeat. Surgeons implant the defibrillators into patients’ chests. When an irregular heartbeat is detected, the device shocks the heart back to its usual rhythm by sending an electrical impulse.

According to the Justice Department, two of Guidant’s lines of defibrillators contained a defect that caused a device’s electrical impulse to be sent back to the defibrillator itself rather than to the heart. This caused the device to short circuit, rendering it worthless. Guidant allegedly learned by April 2002 that its Prizm line was defective, and by November 2003 that its Renewal 1 and 2 lines had the same problem.

Guidant fixed the defects, but allegedly went right on selling its remaining stock of the defective devices. In addition, the device maker allegedly hid the defect from doctors, patients and the FDA until 2005, when confronted by a New York Times reporter. After the Times ran a front-page story about the defective devices, Guidant decided to recall them.

Guidant pleaded guilty to criminal charges in February 2010. In 2011, the federal government intervened in a whistleblower lawsuit filed under the False Claims Act by James Allen, who had been implanted with one of Guidant’s defective defibrillators. For his share of the government’s recovery in the settlement, Allen will receive $2.25 million.

Insiders Blow the Whistle on Medicare Fraud

In this case, it was a patient who notified the government to Guidant’s alleged False Claims Act violations. In most cases, however, health care insiders are the first to identify Medicare fraud. Informants are entitled to an explanation of their rights under the False Claims Act before they file suit. Waters & Kraus has experienced whistleblower lawyers in offices from coast to coast. When it’s time to collaborate with the government to fight Medicare fraud, contact us by email or phone our False Claims Act lawyers at 855.784.0268 to discuss our national qui tam practice and how we can assist you.

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