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Florida Medical Device Firm Fined for Kickbacks

Posted on November 8, 2010

An attorney for a woman who blew the whistle on a medical device company says his client has exposed the lucrative world of doctor kickbacks given by Ela Medical, the maker of heart defibrillators and pacemakers, reports The Miami Herald. Ela Medical will pay a $9.2 million fine after the whistleblower named a dozen Florida hospitals and 25 doctors who participated in the kickback scheme that amounted to fraud under the Civil False Claims Act.

In investigating the fraud, the Department of Justice has found that doctors were over-billing Medicare, implanting an amended heart device not approved by the FDA, and not informing patients that their device could not live up to its 5 year warranty, putting patient safety in jeopardy. Medicare then would be billed for a second operation when the defective device failed.

The field of medical devices is very profitable with a defibrillator costing about $18,000 and a pacemaker about $7,000. Ultimately it is the taxpayer who foots the bill because doctors billed Medicare for the medical devices and up to $4,000 for each patient who became part of a “study.” Ela made $3.2 billion in revenue in 2008 and the company admits in court documents that its sales representatives took part in fraud.

The whistleblower can receive up to 25% of the fine but has had a difficult time finding employment in her field as a medical technician. Even when she transferred to California and took a job with a competitor, she lost her job after the company learned she was involved in a lawsuit.