Medtronic Spine LLC, the corporate successor to Kyphon Inc., will pay the United States $75 million to settle allegations that it caused the submission of false claims to Medicare, according to the Justice Department.
Kyphon has been accused of engaging in a seven-year marketing scheme that resulted in hospitals billing Medicare for kyphoplasties, minimally-invasive surgeries used to treat compression fractures of the spine caused by osteoporosis, cancer or benign lesions. The procedures were allegedly performed on an inpatient basis rather than a less costly and clinically appropriate outpatient treatment.
"Today's settlement demonstrates our commitment to ensure that the Medicare Trust Fund is used to pay for necessary medical care and is not depleted as a result of aggressive marketing schemes intended to increase sales of unnecessary devices or procedures," said Gregory G. Katsas, acting Assistant Attorney General of the Justice Department's Civil Division.
This civil settlement resolves allegations filed in Buffalo, N.Y., by two former employees of Kyphon. Their action was filed under the qui tam provisions of the federal False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.
The whistleblowers in this action will receive $14.9 million as their statutory share of the proceeds of this settlement.
Along with the settlement, Kyphon has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General. The agreement contains measures to ensure compliance with Medicare regulations and policies in the future.
"Those who are complicit in causing the Medicare program to pay out unnecessary dollars will be pursued by OIG and our law enforcement partners," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "This $75 million settlement restores much-needed funding to the Medicare Trust Fund, as well as protecting the integrity of the program and its beneficiaries."