Medtronic to Settle for More Than $9.2M in Kickbacks Case

The United States Department of Justice (DOJ) announced in a news release today that Medtronic USA Inc. will pay $8.1 million in a settlement to resolve allegations that it paid kickbacks to a South Dakota neurosurgeon to use its products, violating the False Claims Act (FCA). The company will also pay $1.11 million to resolve allegations that it did not accurately report the payments it made to the same neurosurgeon to the Centers for Medicare and Medicaid Services (CMS), in violation of the Open Payments Program.

The United States alleged that Medtronic paid for social events at Carnaval Brazilian Grill, owned by South Dakota neurosurgeon Wilson Asfora, knowingly “to benefit Afsora and induce him” to use Medtronic products, according to the DOJ release. The government alleged that Medtronic paid for more than 100 events, for which “Asfora selected and invited his social acquaintances, business partners, favored colleagues, and potential and existing referral sources,” over nine years, according to the DOJ release.

Additional allegations being resolved through the settlement include claims that Medtronic underreported the payments it made to Asfora’s restaurant, violating CMS’ Open Payments Program, under which medical device manufacturers are required to disclose payments or “transfers of value” to physicians.

“Kickbacks undermine the integrity of federal health care programs and increase costs borne by taxpayers,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the DOJ’s Civil Division. “This case demonstrates the Department of Justice’s commitment to ensure that medical device manufacturers do not use improper financial relationships to influence physician decision-making.”

Involved in the investigation were the DOJ’s Civil Division, the U.S. Attorney’s Office for the District of South Dakota, and HHS-OIG. As a result of the investigation and settlement, Medtronic terminated a sales representative and manager and disciplined 12 employees who were involved in the alleged violations.

In a separate lawsuit, the United States filed a complaint against Asfora and two other companies in November 2019, alleging that he violated the FCA through receiving kickbacks for products used in spinal surgeries. That case remains pending.