PHARMACEUTICAL AND DEVICE
DA TE
ENTITY
FCA ALLEGATIONS
AMOUNT
A medical technology company agreed to pay more than $3.6 million to resolve allegations, originating from a self-disclosure to HHS-OIG, that the company billed Medicare for a bone growth stimulator when some of the medical necessity forms included in claim submissions had been completed by sales representatives instead of physicians or a physician’s office. 34 DME provider agreed to pay more than $20 million and one of its co-owners, Margaret Gibson, agreed to pay $4 million to resolve state and federal FCA allegations that they submitted false claims to Medicaid for equipment never ordered or received by patients, some of whom were deceased for many years prior to the claims’ submission. APFFY was also sentenced to five years of probation and ordered to pay a $2 million criminal fine and more than $10 million in restitution. 35 In connection with this conduct, the United States and North Carolina previously obtained a $34.709 million civil default judgment against APFFY’s other co-owner, Shelley Bandy. Bandy pleaded guilty to related criminal charges in December 2020 and was sentenced to 30 months’ imprisonment and ordered to pay $374,800 in restitution on August 27, 2021. APFFY self-reported suspected fraudulent activity related to the above conduct after appointment of a receiver. 36 Pharmaceutical manufacturer agreed to pay $75 million, plus interest, to resolve FCA allegations that it underpaid required quarterly rebates owed under the Medicaid Drug Rebate Program. 37 Two medical device distributorships and their neurosurgeon owner agreed to pay more than $4.4 million to resolve FCA allegations relating to alleged violations of the AKS and medically unnecessary surgeries. The government alleged three separate kickback schemes led to tainted claims and claims for medically unnecessary surgeries in which: (1) the two distributorships paid Dr. Asfora profit distributions in exchange for his use of their own devices; (2) Medical Designs split profits with Dr. Asfora when he used certain devices for which it acted as a distributor; and (3) Dr. Asfora received kickbacks in the form of meals and alcohol paid through a restaurant he owned from another device company in exchange for the use of its devices. Each distributorship will also pay $100,000 to resolve allegations that it violated the Open Payments Program by not reporting payments to Dr. Asfora, and all three parties are excluded from participation in federal healthcare programs for six years. 38
Bioventus, LLC
2/25/2021
$3.609 million
$24.139 million (civil)
A Perfect Fit for You, Inc. (APFFY); Margaret A. Gibson; Shelley Bandy
3/2/2021
$12.444 million (criminal)
Bristol-Myers Squibb
$75 million
4/1/2021
Medical Designs LLC; Sicage LLC; Wilson Asfora, M.D.
$4.4 million
5/3/2021
34 https://www.justice.gov/usao-mdnc/pr/bioventus-agrees-pay-more-36-million-resolve-false-claims-act-violations. 35 https://www.justice.gov/usao-ednc/pr/north-carolina-durable-medical-equipment-corporation-sentenced-10-million-healthcare. 36 https://www.justice.gov/usao-ednc/pr/co-owner-north-carolina-durable-medical-equipment-company-sentenced-prison-role. 37 https://www.justice.gov/usao-edpa/pr/bristol-myers-squibb-pay-75-million-resolve-false-claims-act-allegations-underpayment. 38 https://www.justice.gov/opa/pr/neurosurgeon-and-two-affiliated-companies-agree-pay-44-million-settle-health-care-fraud.
NOTABLE SETTLEMENTS BASS, BERRY & SIMS | 51
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