Abbott Laboratories To Pay $5.475 Million Settlement For Violation Of False Claims Act

Friday, December 27, 2013

Abbott Laboratories, a global healthcare company, has agreed to pay $5.475 million to settle alleged violations of the False Claims Act, and other federal laws and regulations in connection with the operation of its medical device business which manufactures, markets and supplies carotid, biliary, and peripheral vascular products.

As alleged in the settlement agreement, between 2005 and 2010, through its employees and a third party continuing medical education providers, Abbott offered physicians paid teaching and training assignments, consulting arrangements, speaking engagements, and/or sponsorship grants for physician conferences, for the purpose of inducing physicians to arrange for or recommend that the hospitals with which they were affiliated purchase or order Abbott’s carotid, biliary and peripheral vascular products.

These financial arrangements were improper and did not meet the requirements of the Anti-Kickback Statute – a law designed to protect patients as well as the integrity of government-funded health care benefit programs such as Medicare, it was stated.

Where the choice of devices used in medical procedures is impacted by such improper arrangements, suppliers that cause claims for such devices and procedures to be submitted to Medicare and other federal health care programs violate the False Claims Act, authorities said.

U.S. Attorney Bill Killian said, “Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business.” Federal law prohibits medical providers from submitting claims to government-funded health care benefit programs for services and devices referred, ordered, or arranged for by physicians who received such prohibited financial inducements.

“Offering financial inducements can distort health care decision-making,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.” During the period between 2005 and 2010 hospitals affiliated with the physicians who received such inducements submitted to the Medicare program claims which included the cost of the medical devices referred, ordered or arranged for by such physicians. Medicare paid the claims that included the cost of the medical devices. This settlement addresses the financial harm to the Medicare trust fund for the moneys paid out of the fund which resulted from violations of the False Claims Act resulting from the kickbacks, it was stated.

Mr. Killian further noted that this settlement resulted from a comprehensive investigation which began as a result of a qui tam or whistleblower complaint filed in 2010. The investigative team whose efforts resulted in this settlement was comprised of representatives from the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the U.S. Attorney’s Office for the Eastern District of Tennessee, the U.S. Department of Justice Civil Division Fraud Section, and the U.S. Attorney’s Office for the Northern District of California.

U.S. Attorney Killian commended the cooperative efforts of the agencies that participated in this complex investigation, and, in particular, lead HHS-OIG Special Agent Tony Maffei, DOJ Trial Counsel Adam Schwartz, Assistant U.S. Attorney Betsy Tonkin, Assistant U.S. Attorney Tom Green, and Special Assistant U.S. Attorney Ben Cunningham.

He said, "This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $12.1 billion since January 2009 in cases involving fraud against federal health care programs."

 The Justice Department’s total recoveries in False Claims Act cases in 2013 alone exceeded $3.8 billion. False Claims Act recoveries by the United States Attorney’s Office for the Eastern District of Tennessee alone during the period since January 2009 exceed $100 million.


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