On November 8, 2021, the United States Department of Justice (DOJ) announced that it reached a settlement agreement with Florida-based medical device company Arthrex, Inc., resolving allegations that Arthrex violated the False Claims Act by paying kickbacks and causing the submission of false claims to the Medicare program.
The DOJ had alleged that from August 2010 through March 5, 2021, Arthrex agreed to provide remuneration to a Colorado-based orthopedic surgeon – Peter Millett. The payments were purportedly royalty payments for Dr Millett’s contributions to Arthrex’ SutureBridge and SpeedBridge products, two different Arthrex product lines used by surgeons in joint repair surgery. However, in reality, the payments were actually intended to induce his use and recommendation of Arthrex’ products.
The settlement mentions an interesting scenario: in 2006, Arthrex denied Millett’s request for royalties for his contributions to SutureBridge and SpeedBridge. However, when Millett threatened to realign his loyalty to an Arthrex competitor in 2010, Arthrex not only acquiesced to the royalty request (past and future), but paid royalties at a higher percentage rate than was ordinary practice. Therefore, the United States believes that at least one purpose of the payments from Arthrex to Millett was to induce him to purchase, order, or recommend the purchasing/ordering of Arthrex medical devices.
According to the DOJ, this arrangement is a violation of the Federal Anti-Kickback...
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