DFine Inc. Agrees to Pay over $2.3 Million to Settle Claims Under the False Claims Act and Anti-Kickback Statute

A number of laws, including Anti-Kickback laws, generally prohibit the payment of money or other financial incentives to doctors or hospitals in exchange for referrals or for the prescription of particular pharmaceuticals or supplies.  These rules are intended to assure that doctors and other healthcare providers make decisions for their patients based solely upon medical necessity, and not because of some unlawful financial gain.  If a healthcare provider is receiving kickbacks or is involved in an unlawful financial arrangement, the provider is often also violating the False Claims Act, and could be subject to a qui tam lawsuit.  That is precisely the type of unlawful conduct that the Government alleged DFine Inc. engaged in.

On October 26, 2011, the Department of Justice announced that DFine Inc. will be paying $2.39 million to resolve allegations brought against the company under the False Claims Act.  DFine is a privately held medical company that designs and provides devices for spinal injuries.  DFine was accused of using User Preference Evaluations (UPE) to induce physicians into using their products.  DFine paid physicians up to $500 per patient to complete the UPE.  The catch, however, was that the UPE required physicians to use a new DFine device in each patient.  Most of the patients these devices were used on were Medicare patients.  By offering or paying kickbacks in order to encourage referrals of items covered by Medicare, DFine was violating the Anti-Kickback Statute of the False Claims Act.  In addition to paying the settlement, DFine has agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.

The courageous whistleblower in this lawsuit was Brian Eberhard.  Because he blew the whistle on DFine and helped stop their fraudulent activities, Eberhard will be receiving approximately $250,000 from the settlement.  Unfortunately, healthcare fraud is becoming more and more common.  But with the help of whistleblowers like Eberhard, it is now possible that such fraud may be
curtailed.  Since January 2009, the Justice Department has recovered more than $5.9 billion in healthcare fraud cases under the False Claims Act.  If you know about a company committing healthcare fraud, you can help to stop them!  For more information, visit our website at www.fraudfighters.net.

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