Dive Brief:
- Medtronic’s attempt to dismiss whistleblower accusations that it violated the False Claims Act has largely failed, with a court ruling on Thursday that most of the claims can advance.
- The whistleblower accused Medtronic of billing the government for unnecessary medical procedures.
- According to the court, the whistleblower has provided facts about Medtronic’s peripheral artery disease activities “that give rise to a plausible inference that physicians used the devices when not medically necessary.”
Dive Insight:
The lawsuit was filed by a sales manager for a competitor of Medtronic. In 2017, the whistleblower filed the action on behalf of the U.S. However, in 2020, the U.S. decided against litigating the case’s claims. The whistleblower pushed ahead and alleged that Medtronic bribed staff at a Veterans Administration center to induce purchases of its peripheral artery disease devices.
After a court dismissed some claims in 2021, the whistleblower provided more details in a series of revisions to the first complaint. The additional details have persuaded a court in Kansas that most of the case can proceed.
According to the court, the new details cover “false claims based on billing for unnecessary medical procedures involving use of Medtronic devices by [Wichita Radiological Group] physicians” that “it must assume as true, considering all inferences in relator’s favor.” That conclusion led the court to deny one of the motions to dismiss filed by the defendants.
The whistleblower has also accused Medtronic of telling physicians how they “would benefit financially if more devices were used.” Medtronic employees allegedly attended procedures and would “instruct and persuade the physicians to use more and more of the devices – even going so far as to open packaging before a physician even had called for a device.” The court concluded that the allegations “suffice.”
Medtronic succeeded in dismissing an “illegal kickback claim to the extent based on providing marketing services as remuneration.” Earlier lawsuits alleged that marketing services were provided to physicians as a form of kickback and as such the court dismissed the claims based on the public disclosure bar clause in the False Claims Act.