As vaccinations roll out and we all begin our return to normalcy—or at least, to the “new normal,” so too does our firm. Various False Claims Act settlements that have long been in the offing finally have started to come to fruition.
Today, we are pleased to announce two settlements involving False Claims Act whistleblowers represented by Bracker & Marcus LLC.
St. Jude Medical Pacemaker Settlement
First, on July 8, 2021, the Department of Justice announced a settlement with St. Jude Medical, Inc. St. Jude agreed to pay $27 million to settle allegations that, between November 2014 and October 2016, it sold defective pacemakers to health care facilities that were subsequently implanted into patients.
The relator in this matter was proudly represented by Bracker & Marcus counsel Nathan Peak, who brought the case on behalf of one of the recipients of the defective pacemaker.
The complaint alleged that in 2013, St. Jude discovered that the lithium batteries in certain pacemakers were defective. This defect caused a premature drain of the battery, so in 2014, St. Jude asked the Food and Drug Administration (FDA) for permission to change the design of those pacemakers to fix the issue. St. Jude specifically told the FDA that “no serious injury, permanent harm or deaths have been reported associated with this” issue.
The complaint alleged that at the time it made that statement, St. Jude was aware of two reported serious injuries and one death associated with premature battery depletion. Despite knowing of the issue, St. Jude continued to distribute the defective pacemakers, and by August 2016, the number of adverse events had increased to 729, including two deaths.
St. Jude then ceased distribution and issued a recall. But by that point, thousands of the devices had been implanted into patients, including the relator, after they were known to be defective.
Bracker & Marcus LLC is so pleased that this case was intervened and settled, not only recovering money that ought not to have been paid, but also protecting vulnerable patients from harm. Great job, Nate!
Florida Neurological Center Kickback Settlement
On July 16, Florida Neurological Center (FNC), a medical practice in Ocala, Florida, and its owner Dr. Lance Kim, settled allegations that it submitted false claims to Medicare and Medicaid for services that were medically unnecessary or rendered in exchange for kickbacks.
From January 2013 through July 2020, FNC and Dr. Kim were alleged to have prescribed Acthar gel while receiving incentives from drug representatives, such as “speaking engagements” or “training sessions” at a restaurant owned by Dr. Kim.
This is not the first time “wining and dining” kickbacks related to Acthar have made False Claims Act news. In fall 2019, Mallinckrodt, the pharmaceutical manufacturer of Acthar, paid $15.4 million to settle two whistleblower suits alleging violations of the False Claims Act and Anti-Kickback Statute. The relators in those cases similarly alleged that Mallinckrodt threw lavish dinners and events for physicians who prescribed a lot of Acthar.
These defendants settled the claims against them for $800,000 plus interest. We congratulate Assistant Attorney Katherine Ho and the U.S. Attorney’s Office for the Middle District of Florida for this excellent result. The case is captioned United States ex rel. Singbush v. Florida Neurological Center, LLC, 5:19-CV-603-Oc-GPB-PRL.
Our healthcare fraud attorneys at Bracker & Marcus LLC are honored to have had the opportunity to represent the relators in each of these False Claims Act cases.
More Settlements To Come
We expect that a high number of False Claims Act settlements will be announced in the second half of 2021. Many of these cases involved active investigations—often on the verge of resolution—that stalled during the pandemic. That was if the relator and government were lucky. Defendants were often able to run out the clock on investigations, and in many situations where the government was unable to extend the seal to continue its inquiry, good False Claims Act cases died on the vine.
Moreover, the loss of revenues due to the pandemic will inevitably result in a higher number of ability-to-pay settlements (meaning that the defendant’s liability exceeds what they are able to pay, and so they work out settlements based on their finances).
Florida Neurological Center, for instance, was an ability-to-pay settlement. This results not only in lower settlement amounts but long delays in the process as defendants and the government tried to project future revenues in an uncertain time.
We are hopeful and expectant that the end of 2021 and the beginning of 2022 will constitute a heyday for False Claims Act recoveries. Our Atlanta whistleblower attorneys look forward to reporting on more of our firm’s settlements, as well as those of our colleagues.