Aesculap Implant Systems, an orthopedic and spine device maker, agreed to pay $38.5 million in order to resolve False Claims Act allegations.
The agreement resolves allegations that between July 2010 and June 2023, the company sold Vega-brand prosthetic implants for knee replacements that it knew would fail at an unacceptable rate, according to a Nov. 17 news release from the Justice Department.
The implants failing at a higher-than-acceptable rate resulted in subsequent false claims to Medicare and Medicaid.
The Justice Department alleged that the implant was prone to becoming loose shortly after a knee surgery and the bone cement did not properly adhere to the implant.
In addition, the settlement resolves allegations that Aesculap unlawfully paid a physician remuneration in order for him to use the knee implant devices, violating the Anti-Kickback Statute. The payments to the physician included consulting fees, free international travel and entertainment.
Aesculap also entered into a non-prosection agreement with the Justice Department for the distribution of two medical devices that did not have proper FDA clearance.
As of April 2024, the company ceased the sale of all knee replacement devices in the U.S., the release said.
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