Reliance Medical Systems, its owners and two of its physician-owned distributorships will pay a $1 million settlement to settle allegations they violated the False Claims Act by paying spine surgeons to use Reliance devices.
The spine company allegedly used the physician-owned distributorships as "vehicles for the payment of kickbacks" to entice spine surgeons to use Reliance devices, the Justice Department said in a July 1 news release.
Prosecutors argue the physician-owned distributorships paid physicians based on their referrals, made false statements to providers and fired physicians who did not refer enough patients.
Reliance Medical's owners, Bret Berry and Adam Pike, were allegedly recorded trying to induce a spine surgeon to join Kronos Spinal Technologies — one of the company's physician-owned distributorships — by offering to pay him a share of the profits he generated for Kronos after he proved his "loyalty," according to the Justice Department.
The settlement is the latest in a series of settlements with people affiliated with Reliance Medical. The Justice Department said it previously recovered more than $9.25 million from owners of Reliance's physician-owned distributorships.