Life Spine execs allegedly paid millions in kickbacks to surgeons, government intervenes in whistleblower suit

Written by Laura Dyrda | July 25, 2019 | Print  | Email

The Manhattan U.S. Attorney filed a civil healthcare fraud lawsuit on July 23 against Life Spine and two of its leaders for allegedly paying kickbacks to surgeons who used the company's implants. 

Six things to know:

1. The lawsuit alleges Life Spine paid millions of dollars to surgeons in the form of consulting fees, royalties and intellectual property acquisition fees in exchange for using Life Spine implants and equipment. Between 2012 and 2018, the lawsuit states surgeons who received these payments accounted for around half of the company's U.S. sales.

2. Life Spine founder, President and CEO Michael Butler and Vice President of Business Development Richard Greiber were named in the lawsuit for their role in the alleged Anti-Kickback Statute violation. The federal government says the payments Life Spine made to surgeons were inappropriate and caused the surgeons and hospitals to submit false claims to Medicare and Medicaid.

3. The Department of Justice statement on the lawsuit also claims Life Spine "aggressively recruited surgeons" with the potential to be high-volume utilizers of the Life Spine products to serve as paid consultants. The suit also alleges Mr. Butler and Mr. Greiber paid surgeons to transfer patents and patent applications to Life Spine, promising to help them bring their products to market.

4. In exchange for the consulting fees, royalties and IP acquisition, Mr. Butler allegedly expected surgeons to commit to using Life Spine products, according to the DOJ. Mr. Butler and other senior leaders with the company tracked surgeon use of its products and generated a report comparing the consulting, royalty and IP payments to surgeon product usage. The company also calculated "return on investment" for surgeons based on the report.

5. When surgeons had low Life Spine implant use, Mr. Butler and other managers with the company allegedly pressured them to use more products. The DOJ reported surgeons who received payments increased their use of Life Spine implants and technology substantially.

6. A private whistleblower brought the lawsuit against the company, and the government decided to intervene.

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