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Medtronic Inc. Settles Kickback Case for $23.5 Million

DECEMBER 2011 — The Minnesota-based medical device maker Medtronic Inc. has settled allegations by the United States that the company violated the False Claim Act by illegally enticing doctors to implant Medtronic pacemakers and defibrillators in their patients through the use of kickbacks. Medtronic will pay $23.5 million.

The allegations first came to light in two separate whistleblower lawsuits filed in California and Minnesota under the qui tam provisions of the False Claims Act. As part of the settlement, the whistleblowers (also called “relators”) will receive more than $3.96 million from the federal government’s share of the recovery.

The suit alleged that Medtronic caused the submission of false claims to Medicare and Medicaid by using post-market studies and device registries as the means to pay illegal kickbacks to physicians in order to induce the doctors’ use in their patients of pacemakers and defibrillators made by Medtronic. Post-market studies are supposed to gauge the clinical performance of a medical device after its approval by the FDA. Registries are collections of information kept by a medical device manufacturer about its products that have been implanted in patients. Medtronic used the information gathering process as a means to pay participating physicians a fee from $1,000 to $2,000 per patient for implanting a Medtronic product as opposed to a competitor’s.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Los Angeles, San Francisco, Dallas and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in health care fraud cases. Please contact us to learn about our practice and how we can assist.

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