Medical Device Kickback Scheme Uncovered
An Indiana surgeon identified in the civil complaint only as "Dr. A" — and who performed surgeries in Hobart, Merrillville and Munster — generated "by far" more revenue for Huntley, Illinois-based Life Spine than any other physician, including more than $22.9 million overall and roughly a quarter of sales in 2016 and 2017 alone, the lawsuit alleges. The second highest-grossing doctor, by comparison, brought in $3.7 million.
The company also gave "Dr. A" more money than any other physician, millions of dollars from 2012 to 2018, the federal government claims.
Life Spine, which specializes in products for spine procedures, is alleged to have given kickbacks to surgeons — in the forms of consulting, royalty and intellectual property acquisition fees — in exchange for using its implants, devices and other equipment. The lawsuit claims the company often made its expectations known upfront and frequently pressured doctors if the anticipated sales weren't being met.
The allegedly paid-off surgeons made up only a small percentage of Life Spine’s total customers, but they accounted for about half of its domestic sales from 2012 to 2018.
Among the payments to “Dr. A” were more than $295,000 in consulting and royalty fees and trips to speak at events in “vacation destinations.” The federal lawsuit contends that “Dr. A’s” usage of Life Spine products “skyrocketed” after his first intellectual property agreement.