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Benefit Medical Methods achieves comparability with DOJ

MMS reaches an agreement of USD 18 million with the Justice Department in the whistleblower case.

Merit Medical Systems (MMS) has agreed to pay $ 18 million to resolve allegations that Medicare, Medicaid and TRICARE were making false claims by paying doctors and hospitals setbacks for using its products. MMS manufactures single-use medical devices that are used in a variety of medical procedures. Its devices have been used in cardiology, radiology, oncology, critical care and endoscopy.

Anti-Kickback Law prohibits companies from offering payments to initiate referral for items covered by Medicare, Medicaid, and TRICARE. The AKS statute aims to ensure that medical providers use devices in their practice that are based on objective decisions without receiving financial incentives.

A whistleblower lawsuit was filed in 2016 that exposed the kickback system, which pays doctors and facilities to use the MMS line of products. The former Chief Compliance Officer, Dr. Charles J. Wolf, was the whistleblower whose lawsuit alleged the company was in violation of the False Claims Act. He filed a motion after stepping down in April and received $ 2.65 million of the federal stake in the settlement. Wolf argued that he had “made repeated efforts to address violations that he said are deeply ingrained in Merit’s culture”. Documents claim, “Despite these clear and persistent warnings, MMS ignored these concerns and continued the illegal payment system.”

Photo by Natanael Melchor on Unsplash

Merit Medical officials, Wolf said, “sent and ate doctors, sent them on trips to extravagant places, and paid them exorbitant consultancy fees for little or no work” in order to “gain market share at inflated prices” and reach them to buy more Merit products. The lawsuit goes on to say that MMS “used fraudulent advertising disguised as training grants, excessive typing, speaking fees and other money to encourage doctors and hospitals to use several of its specialty medical devices.”

Court records show that MMS launched an internal program, the Local Promotion Program, “which provided healthcare providers with millions of dollars in free advertising, practice development, practice support and unrestricted grants for” education, “” the lawsuit states : “MMS selected healthcare providers for these payments based on previous sales. “

“Federal and state laws prohibit payments to doctors who are designed to influence the choice of their medical devices,” said Veronica Nannis, an attorney with the law firm Joseph Greenwald & Laake who represented Wolf. “When medical device companies pay something of value to encourage doctors to use their devices to the exclusion of others, it can lead to independent medical assessment and patient care.”

Along with the agreement under the False Claims Act, MMS agreed to a five-year corporate integrity contract with the Inspectorate General of the Department of Health and Human Services (HHS-OIG) that requires a compliance professional and an independent review organization to keep an eye on its operations .

Merit Founder, Chairman and CEO Fred Lampropoulos confirmed that an agreement had been reached with the Department of Justice (DOJ). “Given the increasing cost and time requirements associated with the investigation, we believe this solution is in the best interests of the company,” said Lampropoulos. “Merit will continue to focus on our core business: to be the most customer-friendly company in the healthcare sector.”

Sources:

Merit Medical Systems settles the False Claims Act for $ 18 million

Utah-based Merit Medical pays $ 18 million in a doctor setback lawsuit

Medical Device Maker Merit Medical earns $ 18 million to resolve allegations of improper payments to doctors

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