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Medtronic Paying $23.5M To Settle Kickback Claims

World's largest medical device maker will pay $23.5 million to settle allegations that it paid kickbacks to doctors to implant its pacemakers and defibrillators.

MINNEAPOLIS (AP) -- Medtronic Inc., the world's largest maker of medical devices, has agreed to pay $23.5 million to settle allegations that it paid kickbacks to doctors to implant its pacemakers and defibrillators, the U.S. Justice Department said Monday.

The government alleged that Medtronic caused false claims to be submitted to Medicare and Medicaid by using two post-market studies and two device registries as vehicles to pay illegal kickbacks to doctors.

Each of the studies and registries required a new or previous implant of a Medtronic device in each patient. In each case, Medtronic paid doctors a fee ranging from about $1,000 to $2,000 per patient. The government contended that Fridley, Minn.-based Medtronic solicited doctors for the studies to get them to use its devices.

Post-market studies are intended to assess the clinical performance of a medical device or drug after it's been approved by the U.S. Food and Drug Administration.

"Medicare and Medicaid beneficiaries depend on their physicians to make decisions based on sound medical judgment, especially when they are choosing which pacemaker or defibrillator to implant," B. Todd Jones, U.S. attorney for Minnesota, said in a statement. "Medical device manufactures must not be permitted to use improper payments to cloud that judgment."

Medtronic didn't admit wrongdoing as part of the civil settlement.

"Medtronic is happy to have this investigation behind us, so we can continue designing and executing clinical trials that generate evidence to improve patient care, outcomes, and cost effectiveness," Dr. Marshall Stanton, vice president of clinical research and reimbursement for the Cardiac and Vascular Group at Medtronic, said in a statement

Over the past three years, the Justice Department has reached settlements with two other major medical devices makers -- Boston Scientific and St. Jude Medical Inc. -- over similar kickback allegations.

In January 2009, heart device maker Boston Scientific agreed to pay $22 million to resolve allegations its Guidant division paid kickbacks to doctors to get them to use its heart devices. St. Jude Medical, based in St. Paul, Minn., agreed last January to pay $16 million as part of a settlement over allegations it paid kickbacks to physicians to implant its pacemakers and defibrillators. Neither company admitted wrongdoing in those settlements.

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