Regulatory Focus™ > News Articles > 2019 > 3 > Medtronic’s Covidien Agrees to $20M DOJ Settlement Over Kickback Allegations

Medtronic’s Covidien Agrees to $20M DOJ Settlement Over Kickback Allegations

Posted 14 March 2019 | By Ana Mulero 

Medtronic’s Covidien Agrees to $20M DOJ Settlement Over Kickback Allegations

Minnesota-based Covidien, now known as Medtronic Minimally Invasive Therapies, agreed to pay nearly $20 million to resolve kickback allegations related to the sales and promotion of its vein ablation products.

Under the settlement, Covidien will pay about $17.47 million to the US to resolve the alleged violations of the False Claims Act. It will pay an additional $1.47 million to California and $1.04 million to Florida for claims settled by the states’ Medicaid programs, the US Justice Department (DOJ) reported.

The case was brought on by two former sales managers—set to receive $3.14 million of the federal recovery—and a Covidien customer’s former employee. The US argued Covidien allegedly violated the Anti-Kickback Statute when it induced California- and Florida-based health providers to purchase its ClosureFast radiofrequency ablation catheters from January 2011 through September 2014.

“The government contended that Covidien provided discounted or free services to health providers – and so hoped to evade kickback charges,” Steven Ryan, special agent charge for the US Department of Health and Human Services’ (HHS) Office of Inspector General (OIG), said on Monday. “Companies seeking to buy clients through such arrangements can expect to pay a steep price.”

Medtronic’s Covidien also settled allegations that it tailored marketing plans to specific vein practices and held “lunch and learn” meetings and dinners with physicians for referrals to such practices, among other allegations, according to DOJ. The DOJ’s Civil Division, HHS’ OIG, Florida and California states’ attorneys generals, among others, coordinated the effort that resulted in the settlement agreement.

Last December, Medtronic faced a guilty plea and settlement amounting to $51 million in fines and forfeiture in a case brought on by DOJ over alleged distribution of an adulterated device from subsidiary ev3. The charges were filed against ev3 and, correspondingly, Covidien, which purchased ev3 in 2010.

DOJ

Categories: Regulatory News

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