Arthrex Inc., a Florida-based orthopedic device company, has agreed to pay $16 million to resolve allegations that it violated the False Claims Act (FCA) by paying kickbacks to a physician to induce the physician’s use and recommendation of Arthrex products, thereby causing the submission of false claims to the federal government for orthopedic procedures. The settlement resolves allegations that Arthrex paid a Colorado-based orthopedic surgeon millions of dollars under the guise of royalty payments. While Arthrex’s agreement with the surgeon purported to compensate the surgeon for contributing to the development of certain orthopedic products, the government contends that Arthrex made the payments to induce the surgeon’s use and recommendation of Arthrex products. As a result, the government alleges that Arthrex violated the Anti-Kickback Statute and, in turn, the FCA. Under the terms of the settlement agreement, Arthrex will pay the government $16 million. In connection with the settlement, Arthrex entered into a five-year corporate integrity agreement with HHS-OIG, setting forth requirements for future compliance.
