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Medical Device Maker Agrees to Pay $495,000 to Settle Allegations of Improper Kickbacks to Military Physicians
MED-EL USA, a subsidiary of Austrian-based MED-EL, has agreed to pay the U.S. Army and U.S. Navy a total of $494,951 to settle allegations that it improperly provided meals and trips to an Army and a Navy Ear, Nose and Throat (ENT) specialist in 2010 and 2013. The physicians were stationed at Madigan Army Medical Center in Tacoma, Washington and at the San Diego Naval Medical Center in San Diego, California.
The government’s investigation revealed that MED-EL USA targeted the above-referenced Army and Navy ENTs and attempted to influence their choice of hearing devices by providing them free meals, overseas travel opportunities and honoraria requiring little to no actual work by the physicians.
Between 2010 and 2013, MED-EL USA sales to the military jumped from none to $400,000 during the period the two military physicians were the recipients of the company’s largesse.
According to Acting United States Attorney Annette L. Hayes, “Patients need to be confident that their physician is selecting the best and most appropriate medical devices for their medical conditions – not the device that will result in free travel and/or a free meal for their doctor.”
MED-EL USA admits to no wrongdoing in resolving the allegations involved in this settlement. Further, the company has dismissed its former Chief Operating Officer and terminated its relationship with the external sales consultant who orchestrated the alleged improper payments scheme.
The case was investigated by the Seattle Office of the Defense Criminal Investigative Service and the Army Criminal Investigation Command, Major Procurement Fraud Unit.
The defendant/respondent is MED-EL USA, a subsidiary of Austrian-based MED-EL, based in Durham, NC. The exact criminal charges are Impropriately Influencing Military Physicians. The settlement outcome is a total of $494,951. The dollar amount to be paid is $495,000. The case was handled by Assistant United States Attorney Harold Malkin, who heads the Affirmative Civil Enforcement (ACE) Unit for the U.S. Attorney’s Office.
Key Facts
- State: Washington
- Category: White Collar Crime|Fraud
- Source: DOJ Press Release â†â€â€
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