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A global medical technology company has agreed to pay Georgia and the federal government to resolve false claims for improper kickback payments to physicians.

LivaNova USA, Inc. (“LivaNova”), formerly known as Cyberonics, Inc., has agreed to pay the United States and the State of Georgia $1.87 million to resolve allegations that it violated the False Claims Act and the Georgia False Medicaid Claims Act by knowingly paying kickbacks to Georgia physicians with the intent to cause referrals for implantation of LivaNova’s medical devices.

“Healthcare providers must make recommendations about their patients’ health without respect to their own financial interests and medical device manufacturers cannot be permitted to influence that process with thinly-disguised kickback payments,” said U.S. Attorney Byung J. “BJay” Pak. “This settlement demonstrates our commitment to ensuring that the healthcare provided to our citizens, and the medical guidance given by Georgia physicians, is free from improper monetary influence.”

“The success of Georgia’s Medicaid program depends on the integrity of medical professionals in making decisions regarding patient care,” said Attorney General Chris Carr. “When companies provide incentives to physicians that emphasize interests beyond the patient, the entire system is corrupted. I am proud of our Medicaid Fraud Division’s work on this case, and we will continue to work alongside our federal partners to root out this activity.”

The government’s investigation concerned LivaNova’s policy and practice of paying speaking fees to Georgia physicians for supposed speaking and marketing events at which the attendees were primarily the physicians and their own staff.

The physicians who received these fees were amongst the highest referral sources for surgical implantation of LivaNova’s device for treatment of refractory epilepsy. The government alleges that these payments violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), which prohibits the knowing and willful payment of “remuneration” to induce or reward  the generation of business involving any item or service payable by Medicare and Medicaid.  Such violations are actionable under the False Claims Act and the Georgia False Medicaid Claims Act.

The settlement resolves allegations filed by Ashley Case, a former employee of LivaNova, under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.

The False Claims Act also permits the government to intervene in such lawsuits, as it did in this case.  The lawsuit was filed in the Northern District of Georgia and is captioned United States of America and State of Georgia ex rel. Ashley Case v. LivaNova, P.L.C., Civil Action No: 1:16-cv-0807-MHC (N.D. Ga.).  Ms. Case will receive a share of the settlement.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

This matter was investigated by the U.S. Attorney’s Office for the Northern District of Georgia and the Georgia Medicaid Fraud Control Unit.

Assistant U.S. Attorney Gabriel Mendel handled this matter for the U.S. Attorney’s Office.

 

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