The Department of Justice (DOJ) announced earlier this month that Olympus Corp. of Americas, a medical device company, will pay $623.02 million to settle criminal charges and civil claims relating to kickback schemes. Olympus was charged with conspiracy to violate the Anti-Kickback Statute and the False Claims Act.

Medicare regulations state that the Anti-Kickback Statute and the False Claims Act are “designed to prevent or ameliorate fraud, waste and abuse.” 42 C.F.R. § 422.504(h). A physician with a monetary interest in referring a patient to a medical care provider may not always make the decision with the patient’s best interest in mind. This can create unfair competition in the medical market as honest providers compete with providers who are essentially buying patients. This type of competition can cloud a provider’s judgment and corrupt the health care industry.

The Anti-Kickback Statute, therefore, “prohibits the knowing and willful offer, payment, solicitation, or receipt of any remuneration, in cash or in kind, to induce or in return for referring an individual for the furnishing or arranging of any item or service for which payment may be made under a Federal health care program.”

Anti-Kickback Statute violations constitute per se violations of the False Claims Act. 42 U.S.C. § 1320(a)-7b(g). Moreover, “a person need not have actual knowledge of [the Anti-Kickback Statute] or specific intent to commit a violation.” 42 U.S.C. § 1320(a)-7b(h). Therefore, a provider can unknowingly violate the Anti-Kickback Statute and, consequently, the False Claims Act.

Olympus violated the Anti-Kickback Statute by gaining new business and rewarding sales using kickbacks – including foreign travel, extravagant meals, and millions of dollars in grants and free equipment. Those kickbacks violated the Anti-Kickback Statute and, therefore, the False Claims Act.

The case against Olympus was filed under the qui tam provision of the False Claims Act, which allows private individuals to file lawsuits on behalf of the government when those individuals have knowledge of a person or company defrauding the government. The False Claims Act provides monetary incentives for these private individuals, known as whistleblowers, which include 15 to 30 percent of the damages recovered. The whistleblower who brought the case against Olympus will receive $51 million as a reward for their part in the case.

Are you aware of fraud being committed against the federal government, or a state government? If so, the False Claims Act can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.

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