Corporate Compliance

Heart device manufacturer and two hospitals to pay nearly $4M in False Claims suit

Compliance Monitor, June 9, 2010

A Minnesota-based heart device manufacturer, St. Jude Medical Inc., and two hospitals will pay approximately $4 million to resolve false claims allegations, according to a Department of Justice (DOJ) press release.

St. Jude allegedly paid illegal kickbacks to Parma Community General Hospital and Norton Healthcare, located in Ohio and Kentucky respectively, to induce the facilities to use St. Jude’s heart device equipment. St. Jude allegedly paid rebates based on the hospitals’ previous purchases of St. Jude equipment. According to the DOJ, St. Jude also allegedly paid rebates for the hospitals’ purchases of heart device equipment from other companies to induce future purchases of similar equipment from St. Jude.

St. Jude will pay approximately $3.8 million of the settlement, Norton will pay approximately $133,000, and Parma will pay $40,000. Whistleblower Jerry Hudson filed the case under the qui tam provisions of the False Claims Act. Hudson will receive approximately $640,000 of the recovery.

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