Orthofix, a medical device company, announced that agreements have been reached or are near in three of the cases filed against it under the False Claims Act and Foreign Corrupt Practices Act.  According to the company, an agreement in principle has been reached with respect to allegations that subsidiary Blackstone Medical, Inc. paid kickbacks to doctors which improperly incentivized doctors to perform surgeries using its products.  Under the agreement, the company will pay $32 million to resolve the False Claims Act allegations.

The company has also reports reached an agreement in principle with respect to a criminal Foreign Corrupt Practices Act case related to its Mexican orthopedic distribution entity.  Although Orthofix did not announce the amount of its settlement with the DOJ and SEC, the company plans to take a charge of $4.5 million in the fourth quarter of 2011, on top of the $3 million charge it recorded in the first quarter.

The company is also in talks to settle criminal matters and a False Claims Act suit alleging that the company improperly billed Medicare for its bone growth stimulator devices.  According to Orthofix, the company expects to pay $43 million to settle these allegations, the amount it took a charge for in the first quarter of 2011.  This case was filed by Getnick & Getnick LLP.  Additional defendants in the lawsuit are Biomet and its subsidiary EBI, and medical device companies DJO and Smith & Nephew.

Orthofix expects to enter into a five year Corporate Integrity Agreement with the Office of the Inspector General as part of these settlements.

Read the entire article, “Orthofix International Moves to Resolve U.S. Government Legal Matters”