Texas-Based Orthofix Inc. Will Settle False Claims Act Allegations for $34 Million

A lawsuit filed by a whistleblower under the False Claims Act has led to a $34 million settlement for the federal government, of which more than $9 million will be awarded to the whistleblower. Medical device manufacturer Orthofix Inc. will pay the federal government over $34 million to settle allegations that it filed false claims with federal programs for services related to the company’s bone growth stimulator devices, according to the Department of Justice. In addition, Orthofix will plead guilty and pay a criminal fine of $7.7 million for felony obstruction of a federal audit.

Texas-based Orthofix allegedly instructed its sales staff to ignore Medicare rules and make fraudulent claims against federal programs by:

  • Waiving patient co-payments, misrepresenting true cost of devices to federal programs.
  • Paying kickbacks to doctors.
  • Causing submission of fraudulent certificates of medical necessity.
  • Altering or forging patient medical records.
  • Failing to inform patients that they could rent rather than buy Orthofix devices.

Orthofix must also agree to a corporate integrity program under the Office of the Inspector General of the Department of Health and Human Services. Such an agreement establishes procedures and reviews to help avoid and quickly detect similar improper conduct in the future, like paying kick backs also known as referral fees or “fitter fees.”

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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