Kickback Charges Lead to False Claims Act Case

The Manhattan U.S. Attorney’s Office recently announced that the U.S. Department of Justice has intervened in a whistleblower suit against Life Spine Inc., an Illinois-based manufacturer of spinal implants, devices and equipment. The lawsuit, which seeks damages and civil penalties under the False Claims Act (FCA), claims that Life Spine paid millions of dollars in kickbacks to surgeons in the form of consulting fees, royalties, and patent acquisition fees to induce them to use the company’s products.

The lawsuit alleges that the kickback recipients accounted for about half of Life Spine’s U.S. sales of spinal products from 2012 through 2018. Life Spine allegedly recruited surgeons as paid consultants and then tied the payments to their usage of the company’s products.

The Life Spine case furthers a recent trend in which an Anti-Kickback Statute (AKS) violation is used as the basis for an FCA case. Under a provision of the Affordable Care Act, violations of the AKS are per se violations of the FCA.