On Monday, the United States Justice Department announced that medical device maker Arthrex Inc has agreed to pay $16 million to settle accusations that it produced a Colorado orthopedic physician millions of dollars in kickbacks to use and recommend its products. The settlement resolves charges made in a whistleblower complaint filed in federal court in Boston, alleging that Arthrex, based in Naples, Florida, caused Medicare to pay for its goods based on false claims.
As part of the settlement, Arthrex did not admit wrongdoing. A request for comment was not returned by Jack Pirozzolo, lawyer at Sidley Austin. The action was filed under the False Claims Act, which empowers whistleblowers to sue firms on behalf of the government to recover taxpayer funds paid out based on false claims. Following an inquiry, the Justice Department may intervene in such cases.
Arthrex was accused of violating the Anti-Kickback Statute and, as a result, the False Claims Act by causing third parties to make false claims for payment to the federal healthcare program Medicare, according to the authorities. The department has not charged Millett. In a statement, Marc Kasowitz of Kasowitz Benson Torres stated the allegations about the royalty payments are “manifestly incorrect” and that he was entitled to them.