Justice Department Announces False Claims Act Lawsuit Settlement of Case for Kickbacks to Executives Through Sham Counseling

The US Department of Justice (DOJ) announced on March 5, 2020 that it has intervened in two whistleblower cases against Spine Frontier, Inc. (SpineFrontier) and related companies and individuals. The case was brought pursuant to the False Claims Act which allows whistleblowers to receive a percentage of any successful recoveries.

The lawsuit claims that the defendants paid kickbacks to spine surgeons to induce them to use the surgical devices that the company makes. The claim is that the defendants violated the Anti-Kickback Statute (AKS). Violations of the AKS are normally grounds for filing a False Claims Act case.

The DOJ claims that the defendants paid nearly $8 million in “sham consulting” fees to the physicians. The payments were supposed to be to evaluate the products but were essential to induce the doctors to use SpineFrontier’s medical devices.

Kickbacks affect the integrity of the healthcare system. They disadvantage honest physicians. Most importantly, they put the safety of patients at risk.

SpineFrontier is based in Massachusetts. The founder and CEO also owns several related companies. The complaint by the DOJ asserts that from 2013 to 2018, the defendants used one of the related companies as “an intermediary to funnel kickbacks to the spine surgeons.” The defendants paid the physicians from $500 to $1,000 for cervical and lumbar procedures – only if the spine doctors used spine Frontier devices.

The DOJ claims that the spine doctors often just implanted the devices (for which insurance companies paid them). The defendants didn’t collect information from the doctors about the merits of the products.

The two original lawsuits were filed by using the False Claim Act’s qui tam/whistleblower provisions. One whistleblower was a former employee of one of the related companies. Another whistleblower was a former Spine Frontier sales manager.

The California Law Offices of Stephen A. Danz and Associates has a long history of representing whistleblowers. We understand the complexities behind various types of fraud. We work to show your claim is valid and that whistleblowers are entitled to a percentage of the recovery. For help with any whistleblower claim, call us at 877-789-9707 or fill out our online contact form. Se habla espanol.