Medical Device Firm to Pay Massachusetts $1.9M in Kickback Settlement

Authorities announced that a medical device distributor has agreed to pay nearly $1.9 million to Massachusetts’ Medicaid program (MassHealth) over an alleged scheme to pay kickbacks to health care providers.

Massachusetts Attorney General Maura Healey’s office announced the settlement Monday.

Healey joined with other states and the federal government in a settlement with Olympus Corporation of the Americas, a medical device company that sells and distributes medical optics and imaging equipment.

A whistleblower lawsuit was filed in the District of New Jersey alleging that from 2006 through 2011, Olympus provided illegal kickbacks to physicians, hospital employees and representatives, and other health care providers in order to induce them to purchase Olympus equipment.

Officials said these kickbacks allegedly took the form of grants, fellowships, consulting payments, free trips, payment for recreation and leisure activities, gifts, and no-charge loans and free use of equipment.

In one instance, Olympus paid for a number of physicians to travel to Japan and provided sightseeing excursions and lavish entertainment for them.

The government contends that this conduct resulted in false claims or information being submitted to MassHealth for reimbursement.

Under the terms of the national civil settlement, Olympus will pay $306 million to the 50 states, Washington, D.C., and the federal government to resolve claims that its payment of kickbacks caused false claims to be submitted to federal health care programs in violation of the anti-kickback statute and federal and state False Claims Acts.

Nearly $1.9 million will be paid to resolve claims relating to the Massachusetts Medicaid program.

Olympus also entered into a three-year deferred prosecution agreement with the U.S. Attorney’s Office for the District of New Jersey concerning criminal allegations that it conspired to violate the anti-kickback statute.

MassHealth provides healthcare products and services to eligible low-income individuals, including people with disabilities, children and senior citizens.

The joint state/federal investigation was conducted by a team appointed by the National Association of Medicaid Fraud Control Units, the U.S. Department of Justice and the U.S. Attorney’s Office for the District of New Jersey.