Cutter Law PC Announces $12.95 Million Settlement in Whistleblower Case Against Biotronik Alleging Kickbacks to Doctors

July 28, 2022

SACRAMENTO, Calif.–(BUSINESS WIRE)–Cutter Law PC announces that the international medical device company, Biotronik, Inc., has agreed to pay more than $12.95 million to the United States and various States to resolve claims that Biotronik unlawfully paid kickbacks to physicians. The case, U.S. ex rel. Bell et al. v. Biotronik, Inc. et al., case no. 18-cv-01391, was brought by two former Biotronik employees and whistleblowers who are clients of Cutter Law PC. Biotronik will pay the settlement funds to the United States and the Medicaid programs of various States, and will pay the California Department of Insurance $855,000 for false claims made to private insurers in California under a separate agreement.

“This settlement represents an outstanding result for the government and for my clients, and proof that the False Claims Act is an essential tool for keeping companies like Biotronik in check and for fighting and punishing corporate fraud in healthcare” – attorney John R. Parker, Jr., who has served as lead counsel for the whistleblower relators while this case has been pending for more than four years.

In 2017, Mr. Parker’s clients, who at the time both worked for Biotronik, disclosed to the United States that they believed Biotronik was improperly paying kickbacks to physicians implanting Biotronik devices in order to encourage them to implant Biotronik’s cardiac rhythm management products and to discourage them from prescribing Biotronik’s competitors’ products. Biotronik deliberately provided substantial monetary and non-monetary compensation to some of its most important implanting physicians.

Thereafter, in March 2018, Cutter Law PC filed a lawsuit in the United States District Court for the Central District of California on behalf of these whistleblowers under the federal False Claims Act and the false claims acts of several States. The federal False Claims Act and several state statutes allow persons to file qui tam claims on behalf of federal or state governments when they have knowledge of schemes to defraud them.

One of the primary schemes alleged by the relators was that Biotronik paid $400 per procedure to implanting physicians to “train” Biotronik employees in the operating room. But these employees who were trained would be “trained” up to 100 times; essentially, these Biotronik employees’ only job was to be in the room during a procedure so that an implanting physician would receive an extra $400 every time the physician implanted a Biotronik device. With implanting physicians performing as many or 10 or more implants a day, Biotronik was assured that the physicians it was paying would remain loyal implanting physicians.

The United States filed its notice to intervene in the case in 2021 after a lengthy and detailed investigation into Biotronik and its practices that confirmed the whistleblowers’ allegations. A settlement has subsequently been negotiated to resolve the claims of the United States and several states in exchange for a $12.95 million payment by Biotronik. The California Department of Insurance will receive a separate payment of $855,000.

As a result of the announced settlement, the whistleblowers will receive a $2.6 million share of the federal and state portion of the recovery and half of the California Department of Insurance’s recovery. Biotronik will also be paying $500,000 in statutory attorney’s fees and costs and a total of $750,000 to resolve the relators’ individual employment claims. The whistleblowers were represented in the False Claims Act suit by John R. Parker, Jr. and his partner Brooks Cutter, founding member of Cutter Law PC. Cutter Law PC is a complex civil litigation firm in Sacramento and the Bay Area. Mr. Parker and Mr. Cutter specialize in representing qui tam whistleblowers, as well as other claimants in cases of individuals who have been injured by the wrongdoing of insurance companies, pharmaceutical companies, medical device companies, manufacturers, multinational corporations, and employers.