Published on:

U.S. Joins Whistleblowers’ Case Involving Spinal Implants

The Justice Department announced that the U.S. has intervened in a qui tam lawsuit brought by two whistleblowers alleging violations of the False Claims Act and filed its own lawsuit alleging violations of the Anti-Kickback Statute against physicians, a spinal implant company, and others.  According to the government, the lawsuits name the following defendants: Aria Sabit, a Michigan neurosurgeon; Reliance Medical Systems, a company that makes spinal implants; Apex Medical Technologies (“Apex”) and Kronos Spinal Technologies (“Kronos”), both distributors of Reliance products; and individuals Brett Berry, John Hoffman and Adam Pike, owners of the companies.

Two whistleblowers, Cary Savitch, M.D. and Gary Proffett , M.D., filed a lawsuit under the qui tam provision of the False Claims Act in the United States District Court for the Central District of California. The whistleblowers alleged that Apex induced Sabit to perform spinal fusion surgeries that were not medically necessary by making improper payments to him.    According to the whistleblowers, Sabit only started using Reliance implants after he acquired an ownership interest in Apex and began receiving payments from the sale of the spinal implants. The complaint alleges that Sabit received improper payments from Apex totaling $438,570 between May 2010 and July 2012.

In addition to joining the whistleblowers’ complaint, the government filed its own lawsuit alleging that Reliance, Apex, Kronos and their owners paid illegal kickbacks to Sabit and physicians Ali Mesiwala and Gowriharan Thaiyananthan in violation of the Anti-Kickback Statute.  The federal Anti-Kickback Statute prohibits the exchange of anything of value to induce the referral of patients covered by government health care programs such as Medicare. If violations of the Anti-Kickback Statute are proven, the violator may be subject to criminal penalties such as fines of up to $25,000 per violation, up to a 5 year prison term per violation and civil penalties up to three times the amount of the kickback paid and exclusion from participating in federal health care programs.

If any money is recovered in any matter brought under the qui tam provision of the False Claims Act, the whistleblowers may be entitled to share in a percentage of the proceeds.

Read further to see what compensation a whistleblower can earn.