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Arthrex Agrees to $16 Million Settlement in Kickback Case

Arthrex Inc., an orthopedic device company based in Florida, agreed to pay $16 million to settle claims it violated the False Claims Act (FCA) in illegally paying kickbacks to a physician so that physician would use and recommend its products.

The allegations in the case were originally brought forth by a whistleblower under the FCA’s qui tam provisions. That whistleblower will receive 15.625 percent of the recovery.

Case background

The whistleblower claimed Arthrex paid an orthopedic surgeon in Colorado millions of dollars as “royalty” payments, when really the money was to compensate the surgeon for their use and recommendation of its products in violation of the Anti-Kickback Statute and the FCA.

The federal government classifies kickbacks as a form of bribery. They are among the most common types of healthcare fraud—a field that comprises billions of dollars of fraudulent activity every year.

Companies that attempt to create these schemes typically do so in hopes that paying doctors for using their products will result in an increase of their own profits. However, patient trust is critical in healthcare, and patients must be able to trust that their doctors are recommending a medication or treatment option because it is best for their health outcome, not because it would inflate the doctor’s own pocket. Kickbacks compromise quality patient care and the integrity of healthcare systems.

In many cases, information about kickback schemes and other healthcare fraud would never come to light without the reports of whistleblowers. This is why the qui tam provisions of the FCA exist–to ensure whistleblowers have an opportunity to share their information and be properly rewarded for their contributions.

To learn more about the legal options you have available to you if you become aware of fraud within a healthcare organization, contact an experienced whistleblower attorney at Kardell Law Group.

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