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Orthofix, Inc. Agrees to Pay Over $34 Million To Settle Qui Tam Lawsuit Under False Claims Act

Date Published
Jun 12, 2012

Last week, the Department of Justice announced yet another success on behalf of the U.S. Government and the American taxpayers.  Orthofix, Inc. is a medical device manufacturer based in McKinney, Texas.  The company agreed to pay $34,234,263 to resolve a False Claims Act lawsuit arising out of its alleged illegal promotion of its bone growth stimulators Orthofix Spinal-Stim, Orthofix Cervical-Stim, and Orthofix Phsysio-Stim.

According to the complaint, Orthofix waived patient co-payments when they should not have done so.  By doing this, Orthofix allegedly misstated the costs of their stimulators and caused federal programs to overpay for them.  Additionally, the company was accused of paying kickbacks to doctors’ offices in order to induce them to use Orthofix products, submitting false certificates of medical necessity for Orthofix’s products, and failing to tell patients that they could rent rather than buy Orthofix’s stimulators.

In addition to the civil settlement in this case, Orthofix agreed to plead guilty to criminal charges of interfering with a federal audit.  It will pay a $7,765,737 criminal fine.

The government was alerted to Orthofix’s behavior by whistleblower Jeffrey Bierman, a Midwest healthcare consultant.  Under the qui-tam provisions of the False Claims Act, whistleblowers like Mr. Bierman may receive between 15% and 30% of any civil recoveries.  As his relator’s award in this case, Mr. Bierman will receive $9,243,251: a 27% share of the settlement!

Tycko & Zavareei LLP applauds Mr. Bierman’s courage to stand up and report Orthofix’s unacceptable behavior.  When so many companies today are taking advantage of federal programs designed to help Americans, like Medicare and Medicaid, it is crucial that individual citizens take action.  If you are aware of fraud being committed against the government, contact the experienced attorneys at Tycko & Zavareei LLP to discuss it today.

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