The court denied dismissal, affirming jurisdiction over the qui tam claim, despite a post-filing release, because the government’s approval is required for settlement.
A federal District Court in Florida has denied the motion to dismiss filed by Nextstep Arthropedix, LLC, (NextStep or Manufacturer) in a False Claims Act (FCA) lawsuit brought by a Relator who claimed that the Manufacturer violated the Anti-kickback statute (AKS) by way of paying royalties to hip surgeons who ordered their medical device (System). As to the argument that the Relator lacked standing due to an earlier release to the Manufacturer in an employment case, the court found that the release did not bar the FCA lawsuit that was already pending prior to the employment case release. Furthermore, the alleged royalty scheme did not fall under the Safe Harbor provision of the AKS because although it appeared to comply with that exception on paper, the Relator’s first-hand knowledge of the scheme provided sufficient particularity as to the fraudulent scheme (U.S. ex rel. Fries v. NextStep Arthropedix, LLC, No. 2:22-cv-00098-KCD-NPM (M.D. Fla. Sept. 11, 2026)).
Surgeon Consultants. NextStep is a medical-device company which designs hip, knee and spine prosthetics. In 2013, NextStep developed a total hip arthroplasty system used in hip replacement surgeries (the System), and later that year, NextStep began forming a ‘Surgeon Consultant Team’ consisting of surgeons who regularly perform hip replacement...
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