A federal judge in Massachusetts allowed parts of a whistleblower lawsuit against medical devicemaker Zimmer Biomet to proceed, finding sufficient evidence for a jury to consider whether its commission payments to independent contractor sales representatives violated federal anti-kickback law.
The lawsuit, filed in August 2021 by former sales representative Todd Langer, alleges Zimmer Biomet violated the Anti-Kickback Statute by paying commissions to independent contractors who promoted its orthopedic products to surgeons and hospitals. The alleged violations form the basis of claims under the False Claims Act.
In an Oct. 21 ruling, U.S. District Judge Patti Saris rejected the argument that commission-based payments to independent contractors automatically violate the Anti-Kickback Statute. The judge said such payments must involve an intent to improperly influence healthcare decisions rather than simply increase sales.
However, the court found enough evidence for a jury to consider whether Zimmer Biomet paid the commissions with the unlawful intent to induce referrals. The evidence included sales representatives’ presence during surgical procedures, meals and private jet travel provided to surgeons, and efforts to promote more expensive products.
Zimmer Biomet had sought summary judgment, arguing its compensation arrangements did not violate federal law and the whistleblower lacked sufficient evidence to establish False Claims Act liability. The court granted the company’s motion in part and denied it in part, dismissing claims based on a false certification theory and all state and local claims except one under Colorado law.
According to the ruling, Zimmer Biomet moved its employed sales representatives in direct territories to independent contractor status as of Jan. 1, 2016, after the 2015 merger of Zimmer and Biomet.
The ruling does not establish that Zimmer Biomet violated the law. Becker’s has reached out to Zimmer Biomet for comment and will update this story if the company responds.
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