Medical Device Maker Agrees to $8 Million Settlement in FCA Violation Case

Cardiovascular Services Inc., a Minneapolis-based manufacturer of a heart surgery device, will pay $8 million to settle a case in which it was accused of violating False Claim Act regulations.

The company was accused of providing kickbacks — in the form of marketing support — to physicians who charged the government for their use of the device. One of the company’s former sales managers, who worked for CSI from 2012 to 2013, filed the lawsuit. He claimed the company would regularly offer kickbacks to physicians who used its devices, while also promoting the devices for off-label applications.

‘Marketing support’ at the center of the case

In the Department of Justice settlement, U.S. Attorney Jill Westmoreland Rose said that investigators had found that the company had been assisting doctors who used its products with referrals to help build their medical practices. Government officials say that this form of marketing support was illegal because the physicians in question were charging Medicaid and Medicare for their services at the time.

According to the DOJ, the former sales manager will receive 25 percent of the money CSI pays out as his reward for blowing the whistle.

CSI’s devices are used in surgical procedures to unblock restricted arteries in the heart. The settlement with the DOJ did not mention the off-label promotion, which constituted the second part of the whistleblower’s claims.

This case serves as another example of how an internal whistleblower can cause headaches for a company, and the importance for organizations like CSI to respond to and investigate these claims quickly to avoid potential legal consequences. To learn more about how you can better protect your company, contact a skilled Dallas lawyer with Whistleblower Law for Managers.