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article imageList of largest medical fines revealed

By Tim Sandle     Mar 18, 2016 in Health
The last couple of years have seen a slight lowering in the number of cases brought against medical companies; however, at the same time, there was an increase in the level of fines paid out.
Using data from the U.S. Department of Health and Human Services, researchers Chris Newmarker and Brian Buntz have reviewed the most significant cases in recent years. They note the biggest recent settlement related to the company Olympus in relation to endoscopes, where the company was required to pay fines of $646 million. This is said to be the largest total amount paid in U.S. history for violations involving the Anti-Kickback Statute by a medical device company.
The Anti-Kickback Statute relates to false claims and misrepresentation of facts in relation to a product. The current status was amended with the passing of the Affordable Care Act. According to Forbes: “the implementation of Medicare Fraud Strike Forces in major cities throughout the country, and an increase in the potential criminal penalties under the United States Sentencing Guidelines, the federal government’s determination to root out health care fraud has long seemed vigorous and unrelenting.”
In terms of fraud, it is noted there $53.6 million in fraud pay-outs for the fiscal year ending September 30, 2015. The majority of fraud fines relate to off-label promotion of products. Hospital Review notes: “Criminal penalties can include fines up to $25,000 and a five-year prison term per kickback while civil penalties can cost as much as $50,000 per kickback in addition to three times the amount of damages sustained by the government.”
The five major medical device–related fraud settlements in recent years have been:
Olympus: $646 Million
This related to endoscopes. Here the federal government said the Olympus kickbacks related to consulting payments, foreign travel, lavish meals, millions of dollars in grants, and free endoscopes.
OtisMed Corp: $80 Million
This related to settling federal criminal and civil cases relating to the sale of devices without FDA approval as well as questionable bills to Medicare, Medicaid, and other federal programs.
NuVasive: $13.5 Million
This related to allegations that the company promoted a device called the CoRoent System for surgical uses that were not approved or cleared by the FDA.
Medtronic: $4.4 Million
Medtronic paid the money to settle a federal whistleblower lawsuit relating to a claim that devices made in China and Malaysia were actually made in the U.S.
ev3: $1.3 Million
The company is a subsidiary of Medtronic. Here ev3 settled with the U.S. to resolve claims that its predecessor company – called Fox Hollow Technologies - caused some hospitals to submit false claims to Medicare.
These cases are a sign that the 2014 legislation is having effect.
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