Covidien settles with FTC over alleged provision of illegal remuneration to physicians

Medical products and generic drugmaker Covidien has agreed to pay just under $17.5 million to resolve allegations that it violated the False Claims Act by providing free or discounted practice development and market development support to physicians located in California and Florida to induce purchases of Covidien’s vein ablation products, the US Department of Justice announced on Monday.

“Today’s settlement serves as an important reminder to those in the health care community that unlawful kickbacks come in many forms and are not limited to monetary payments to providers,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, adding: “Providing free or discounted services to health care providers to induce the use of certain items or services can lead to excessive and unnecessary treatments, and drive up health care costs for everyone.”

The United States alleged that Covidien violated the Anti-Kickback Statute and, correspondingly, the False Claims Act by providing practice development and market development support to health care providers located in California and Florida from January 1, 2011, through September 30, 2014, to induce those providers to purchase ClosureFASTradiofrequency ablation catheters that were billed to Medicare and to the California and Florida Medicaid programs.