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NJ doctors: One important lesson from recent kickback case

The U.S. Attorney's Office in New Jersey recently completed an investigation that resulted in health care fraud charges for a medical device company. The investigation was the result of a qui tam lawsuit. This whistleblower claim began when a non-practicing physician filed a complaint about the company, Merit Medical Systems, Inc., stating he formerly worked with the medical device company and that his attempts at encouraging compliance while employed were "to no avail."

He ultimately chose to resign from his position and reported the alleged failure to comply to the Department of Justice (DOJ).

According to the results of the investigation, conducted as collaborative effort between the DOJ and the U.S. Attorney's Office in New Jersey over a span of four years, the company provided illegal kickbacks through paid advertising for loyal customers. Physicians who chose to use their devices allegedly received this illegal kickback as well as consulting fees. The lawsuit claims the fees were not educational, as stated, but instead used by the medical device company solely to induce the physicians to purchase additional equipment.

The investigation led to allegations of violations of federal and state law. At this time, 29 states, including New Jersey, are included within the lawsuit.

The case provides an example of the slippery slope that is present when physicians take consulting fees and other benefits from medical device suppliers. These benefits can result in an investigation and allegations of wrongdoing. The case provides a reminder of the importance of building a defense to defeat the government's claim that the benefits tainted the physicians' ability to provide care to their patients by providing financial incentive to use certain products. If unable to do so, the case is likely to move forward.

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