Troubled Manufacturer Boston Scientific Agrees to Settle with Government Over Medicare Fraud Defective Defibrillator Lawsuit
Boston Scientific and its subsidy Guidant Sales LLC, along with Cardiac Pacemakers LLC, have agreed to pay $30 million to the US Government in a Medicare fraud lawsuit alleging that the companies sold defective defibrillators and other heart devices.
On Thursday, October 17th, the Justice Department announced the settlement with medical manufacturer Boston Scientific and their troubled subsidiary, Guidant. The subsidiary company was accused of selling defective defibrillators and pacemakers to health care facilities between April 2002 and April 2005. The defective heart devices were specifically for use with Medicare patients, which puts those patients at greater risk of device failure and consequent death.
“Medicare patients who depend on cardiac defibrillators should not have to worry about whether their devices will work when they are needed,” a news release quoted Stuart F. Delery, assistant attorney general for the Justice Department’s Civil Division. “This settlement, along with the prior criminal prosecution of Guidant, demonstrates that there will be significant consequences when companies engage in conduct that threatens health and safety and violates the law.”
Boston Scientific purchased Guidant in 2006. The Medicare fraud lawsuit was filed against Guidant, and consequently Boston Scientific, in 2011.
A spokesman for Boston Scientific said in a statement Thursday that “while the company continues to deny the allegations made in the complaint, it felt it was in the best interests of all parties to settle this matter and avoid further protracted litigation.”
The government’s complaint involved two specific models of defective defibrillators – the Prizm 2 and the Renewal 1 and 2. The defibrillators suffered from a problem called “arcing,” in which current travels back into the device itself, rather than into the patient to help stabilize their heartbeat. Arcing can cause the device to short-circuit.
In 2002, the US government complained that the Prizm 2 was defective, and as early as November 2003, that the Renewal 1 and 2 were defective. At the time Guidant took steps to fix the arcing problem, but defrauded the Medicare program by continuing to sell old stock of the devices, rather than issuing a true recall. Guidant pleaded guilty to the False Claims Act charges in 2010.
Medicare Fraud Whistleblower James Allen, who filed the qui tam suit in 2010, will receive $2.25 million from the settlement.
False Claims Act Protects Medicare Fraud Whistleblower Lawsuits
Medicare and Medicaid are government-sponsored health care programs that help the needy and the elderly cover health care costs associated with aging and disability. These programs are hugely important for people living on a fixed income, so it is incumbent upon doctors to honestly report costs both to patients and to the government. Unfortunately, not all health care providers are honest in their assessments. Some health care providers defraud the government, in violation of the False Claims Act, by overbilling for services, double billing, or billing for services not provided. The False Claims Act imposes liability on persons or corporations that defraud the government – and this includes doctors, hospitals, and nursing homes. The False Claims Act provides protection for those who report agencies or individuals who are defrauding the government. These lawsuits are called whistleblower, or qui tam, lawsuits. Under the qui tam provision of the False Claims Act, the relator (plaintiff) files an action on behalf of the U.S. Government. The Act allows a wide variety of people and entities to file a qui tam action. The whistleblower must have first-hand knowledge of the fraud. However, as an incentive for reporting the fraud, whistleblowers are eligible for 15-25% of any recovered damages.
The Strom Law Firm Protects Medicare Fraud Whistleblowers in South Carolina
If you have first-hand knowledge of Medicare fraud occurring at your place of employment or your doctor’s office, from overbilling patients to using defective devices, the Strom Law Firm can help. In order to help the government provide the best possible services, Medicaid and Medicare fraud must be reported as soon as possible. The attorneys at the Strom Law Firm understand the complexity of qui tam and whistleblower suits, and we offer free, confidential consultations to discuss the facts of your case. Contact us today. 803.252.4800