Device Manufacturer Fraud

What is medical device manufacturer fraud?

Fraud by medical device manufacturers under the False Claims Act includes knowingly manufacturing defective devices for use by beneficiaries of federal and state health insurance programs, reporting false data about medical device failures to the FDA, and paying kickbacks to healthcare providers to prescribe or order devices.

Qui tam lawsuits are often brought by whistleblowers against manufacturers of medical devices. Device manufactures can violate the False Claims Act in several different ways.

First, they can be liable under the False Claims Act for manufacturing devices that they know are seriously defective and will be provided to beneficiaries of federally funded health care programs, such as Medicare, the jointly federal- and state-funded Medicaid program, or TRICARE.

Similarly, medical device manufacturers can be liable for covering up defects by reporting false data or failing to make required reports of adverse events (or by making false reports of adverse events), in order to prevent the Food and Drug Administration (“FDA”) from learning of defects in the devices that are being provided to Medicare, Medicaid, or TRICARE patients.

Alternatively, manufacturers can be liable for paying unlawful kickbacks to hospitals, physicians, nurses, staff, or anyone else in a position to purchase — or influence the decision to purchase — a particular medical device for a Medicare, Medicaid, or TRICARE patient.

VSG’s Qui Tam Attorneys Are Experienced in Handling Device Manufacturer Fraud Cases

VSG’s qui tam lawyers have handled several qui tam False Claims Act cases in which their whistleblower clients have recovered against medical device manufacturers. In a qui tam case against LifeScan, a Johnson & Johnson company, two whistleblowers (“relators”), represented by a VSG partner, alleged that LifeScan was violating the False Claims Act in connection with the manufacture and sale of the SureStep blood glucose monitor. Specifically, the qui tam False Claims Act lawsuit alleged that LifeScan was knowingly making defective blood glucose monitors that were being sold to Medicare patients, and that, despite learning about adverse events involving the monitors, LifeScan was failing to report these adverse events to the FDA. LifeScan ultimately resolved the civil lawsuit by paying the United States $30.6 million, of which $6.3 million was paid as a whistleblower award.

In another False Claims Act whistleblower lawsuit, a VSG client alleged that Blackstone Medical, Inc., a medical device manufacturer, was paying unlawful kickbacks to Arkansas physicians to recommend the purchase of Blackstone’s devices. These devices were then used in back surgeries performed on Medicare beneficiaries. The government declined to intervene in the case, but VSG, together with Arkansas co-counsel, continued to pursue the matter on behalf of the whistleblower, who was a sales representative who worked for a competitor of Blackstone. After litigation spanning more than four years, the defendants settled the matter, paying the Government a total of $3.3 million.