St Jude pays DOJ $3.7m to settle rebate and false claims probe
This article was originally published in RAJ Devices
St Jude Medical has agreed to pay the US Department of Justice $3.7 million to resolve an investigation into alleged kickbacks made by the company to two hospitals1.
The St Paul, Minnesota, firm came under scrutiny in July 2007 after a whistleblower accused it of giving rebates to Parma Community General Hospital (Parma, Ohio) and Norton Healthcare (Louisville, Kentucky) on purchases of the company's heart devices. These kickbacks caused false claims to be submitted to federal healthcare programmes in violation of the False Claims Act, the DOJ alleged.
St Jude has not admitted liability or wrongdoing, though it did say that the government's claims centred on "small, isolated product rebates that the company paid more than five years ago". In settling this agreement, St Jude stated that it would avoid "the potential costs and risks associated with litigation".
The company said that the settlement would have no material impact on its financial position or operations.
Nearly $4m total settlement
In addition to St Jude's $3.7m, Parma Hospital and Norton Healthcare will be paying the government $40,000 and $133,300, respectively, to resolve the investigation2. Jerry Hudson, the whistleblower, will get $640,000 as his share of the settlement.
References
1. St Jude Medical press release, 4 June 2010, http://investors.sjm.com/phoenix.zhtml?c=73836&p=irol-newsArticle&ID=1434818
2. DOJ press release, 4 June 2010, www.justice.gov/opa/pr/2010/June/10-civ-658.html