Katz, Marshall & Banks and Willig, Williams & Davidson Secure Multi-Million Dollar Settlement with Medical Device Company in False Claims Act Whistleblower Suit

Katz, Marshall & Banks, along with co-counsel Willig, Williams & Davidson represented a whistleblower in a successful False Claims Act case against Medicrea, a medical device company. 

Find the Department of Justice's statement here, and Policy and Medicine's coverage of the settlement here, and Law360's here (subscription required).

Read the press release below.

PHILADELPHIA, Pa. (May 20, 2021) – The United States Attorney’s Office for the Eastern District of Pennsylvania announced yesterday that a surgical spinal device company, Medicrea, will pay a total of $2 million to federal and state governments to settle allegations that it violated anti-kickback laws, and failed to disclose to the Center for Medicare and Medicaid Services payments it made to healthcare providers. Medicrea manufactures, markets, and sells medical devices designed to treat spinal diseases.

The whistleblower, a former national sales trainer for Medicrea USA, filed the suit against Medicrea under the qui tam provisions of the U.S. False Claims Act and state false claims laws. She is represented by attorneys Ryan Hancock of Willig, Williams & Davidson and Michael Filoromo of Katz, Marshall & Banks, whistleblower law firms with offices in Philadelphia.

Under the federal False Claims Act and analogous state laws, private citizens may bring suit on behalf of the government for fraud and misuse of public funds and may share in any recovery. In this case, the whistleblower will receive 22 percent of the False Claims Act proceeds.

The 2016 qui tam lawsuit alleged that Medicrea provided unlawful kickbacks – including meals, alcoholic beverages, entertainment, and travel expenses – to surgeons who attended a lavish conference near the company’s headquarters in Lyon, France.  According to the complaint, the purpose of these benefits was to induce physicians to purchase, order, or recommend Medicrea’s costly spinal devices.  A large percentage of these devices were reimbursed under federal and state healthcare programs, including Medicare and Medicaid. 

The government also contended that Medicrea failed to abide by regulations under the Open Payments Program, formerly known as the Sunshine Act.  The Open Payments Program requires that companies that receive Medicare payments disclose to the Center for Medicare and Medicaid Services what payments or transfers of value were made to physicians.

Whistleblower attorneys Ryan Hancock and Michael Filoromo hailed the settlement and praised their client for coming forward.  According to Filoromo, “Today’s settlement underscores the importance of the False Claims Act as an enforcement tool.  The insider knowledge our client provided to the government was crucial in uncovering this kickback scheme.” 

Hancock added, “Our client saw something illegal, risked her job to speak up, and aided the government in holding the company accountable.  We are proud to represent such a courageous individual.”

Find the Department of Justice press release here.