Covidien to Pay $20M to Settle Charges for Allegedly Violating False Claims Act

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Covidien, a medical supply distributor, agreed to pay $20 million to settle charges alleging that it violated the False Claims Act and the Anti-Kickback Statute.

The United States government alleged that Covidien violated the False Claims Act and the Anti-Kickback Statute by providing free or discounted practice development and market development support to physicians in California and Florida to induce purchases of its vein ablation products.

The physicians purchased Covidien’s Closure FASTTM radiofrequency ablation catheters and billed California and Florida’s Medicaid programs. Physicians use the ablation catheters in procedures to treat patients with venous reflux disease.

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Under the settlement agreement, Covidien will pay $17,477,947 to the United States government to resolve its False Claims Act violation.

Additionally, the company will pay $1,474,892 to California and $1,047,160 to Florida for claims settled by both states’ Medicaid program.

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In a statement, Assistant Attorney General Jody Hunt of the U.S. Department of Justice (DOJ) Civil Division, said, “Today’s settlement serves as an important reminder to those in the health care community that unlawful kickbacks come in many forms and are not limited to monetary payments to providers.”