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U.S. to Intervene in Fraud Case Against Heart Device Manufacturer

The Department of Justice (DOJ) is seeking to intervene in a qui tam lawsuit against St. Jude Medical Inc., a manufacturer of pacemakers and other heart devices.  The DOJ initially began its investigation in 2005, and this past December decided not to intervene in the case.  However, after talking to more witnesses and uncovering more documents, the DOJ now says it has “good cause” to intervene, according to a federal district court document filed in Boston on August 5th.

The lawsuit alleges St. Jude operated a kickback scheme with doctors, hospitals, and other health providers.  St. Jude allegedly paid these health care providers money in exchange for the providers prescribing its products.  The providers would then seek reimbursement from federal health programs such as Medicare by submitting claims that falsely disguised the kickbacks.  This caused St. Jude to be liable under the False Claims Act because it caused a false claim for payment to be submitted to the federal government.

The lawsuit was initially filed by Charles Donigian, a technical services specialist at St. Jude.  According to Mr. Donigian, St. Jude paid kickbacks to health care providers in the form of “sham fees” for fake clinical research studies.  Mr. Donigian also alleges that St. Jude lavished health care proividers with “entertainment, gifts, travel, vacations, temporary staff, tickets to sporting events, ‘educational’ events at luxury results and other illegal inducements.”  If the government does take over responsibilities for the case, Mr. Donigian will be entitled to 15% to 25% of any recovery obtained, rather than 25% to 30%.

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