Medical Device Maker Merit Medical To Pay $18 Million To Settle Allegations Of Improper Payments To Physicians

in Whistleblower (False Claims Act, Qui Tam) October 14th, 2020

For Immediate Release

Contact: Joseph Greenwald & Laake, P.A.

Veronica Nannis; vnannis@jgllaw.com

Jay Holland; jholland@jgllaw.com

Phone: 301-220-2200

WHISTLEBLOWER LAWSUIT AGAINST MEDICAL DEVICE COMPANY SETTLES FOR $18 MILLION AND CONTINUING COMPLIANCE MONITORING

Suit by former compliance officer alleged kickback scheme to pay for physician

advertising and grants to induce their use of company’s products.

 

GREENBELT, MD – October 14, 2020Joseph, Greenwald & Laake, P.A. represents a  former Chief Compliance Officer and whistleblower against a medical device company in a case that settled today with the federal government and numerous participating states for $18 million. The False Claims Act (qui tam) complaint against Utah-based Merit Medical, Inc. alleged an extensive fraud scheme involving unlawful kickbacks to physicians to induce their use of Merit’s devices over those of its competitors. As a result of the whistleblower’s actions, Health and Human Services Office of Inspector General also entered into a five year Corporate Integrity Agreement with Merit related to this case, which requires the company to submit to ongoing compliance monitoring.     

The whistleblower, Dr. Charles Wolf, is a non-practicing medical doctor and an accredited healthcare compliance professional with over 20 years of experience. The complaint recounted how Dr. Wolf reported his concerns about the alleged fraud to Merit’s management during his tenure as its Chief Compliance Officer, all to no avail. Unable to effect change from within, Dr. Wolf resigned from Merit and reported his information to the Department of Justice, which undertook a thorough investigation before deciding to intervene.

The lawsuit was made public on June 12, 2020, after the United States filed its notice of intervention and the Court unsealed the case. On July 9, 2020, the government notified the Court of a resolution, and today the government filed a dismissal of the action and issued its own press release.

The complaint focused on kickback allegations that Merit provided paid advertising, practice support and unrestricted “educational grants” for loyal Merit users in order to influence physicians to use Merit devices. Disguised as educational in nature, the suit claims that, instead, the money paid to physicians was meant to effect and “induce hospitals and physicians to purchase additional equipment, supplies and/or products from Merit” in violation of the Anti-Kickback Statute.  

Federal and state laws prohibit payments of any kind to physicians – including marketing dollars or “educational grants” – to influence physician choice of medical devices. “Prosecuting these cases protects our healthcare system broadly, and patients more specifically. When medical device companies pay something of value to induce physicians to use their devices to the exclusion of others, that can effect independent medical judgment and patient care,” said Veronica Nannis. Nannis and her partner, Jay Holland, represented the whistleblower along with former Assistant United States Attorney, Timothy J. McInnis.

Holland touted the four-year investigation performed by Department of Justice and the U.S. Attorney’s Office in New Jersey and the strong partnership between whistleblower’s counsel and the government. “The government was unwavering in its pursuit of justice here. Its intervention after a long, careful investigation and then its resolution of this case underscores its goal of protecting patients, rooting out fraud and recouping tax dollars,” said Holland.

The case is captioned U.S. ex rel. Wolf v. Merit Medical Systems, Inc., et al., Case No. 2:16-cv-01855-CCC-MF, United States District Court for the District of New Jersey, Newark Division. The Relator is represented by a team of experienced whistleblower attorneys including Jay Holland and Veronica Nannis of Joseph, Greenwald & Laake and Timothy McInnis of McInnis Law. The federal government’s team was led by Chris Terranova, Trial Attorney, U.S. Department of Justice, and Andrew A. Caffrey III, Assistant U.S. Attorney in the Health Care and Government Fraud Unit out of Newark, NJ. A fantastic team from the National Association of Medicaid Control Fraud Units was also invaluable in representing the states’ interests.

Jay Holland is a partner at Joseph, Greenwald & Laake, and is Chair of the Firm’s Labor, Employment and Qui Tam Departments. His False Claims Act cases have resulted in recoveries of over $600 Million for the United States. His recent publications include articles for The National Law Journal, Trial Magazine, D.C. Trial Lawyer, and the Maryland State Bar Association Employment Law Deskbook.

He can be reached at jholland@jgllaw.com

 

Veronica Nannis is a partner at Joseph, Greenwald & Laake and serves as the Chair of the Firm’s Civil Litigation Department. She litigates qui tam cases and consumer class actions nationwide, typically involving kickbacks and other fraud. A Super Lawyer’s Rising Star in DC and Maryland for several years, she was awarded the MAJ Trial Lawyer of the Year Award in 2011. Past publications include those for Law 360, the ABA Health e-Source, and The Daily Record. She can be reached at vnannis@jgllaw.com

 

 

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