Medical device maker Boston Scientific has agreed to settle a qui tam lawsuit that accused it bilking Medicare and hospitals. The company will pay more than $9 million to end the case against its Guidant subsidiary, which had been accused by area salesman Robert Fry, who worked in Tennessee and Kentucky from 1981 to 1997. Fry will receive $2.3 million as part of the settlement.
Here's an excerpt detailing Guidant's alleged scheme to conceal warranty credits from a 2006 order denying the company's motion to dismiss:
"Mr. Fry alleges that it was the practice of Guidant salesmen to open and remove the IMD from its sealed container and dispose of the container, with the IMD's written warranty, in the operating room's trash can. During a period of time at St. Thomas Hospital, located in Nashville, Tennessee, Guidant salesmen were banned from the operating room during the implant procedures. In order to keep the warranties from hospital personnel, Guidant agents instructed the clinical technician or pacing nurse to deliver the warranty to the doctor's office, or place the warranty in the patient booklet that was taken home by the patient.
Without access to the written waranty, the hospital personnel responsible for paying Guidant's bills, and for requesting reimbursement from Medicare and Medicaid, had no knowledge of the availaibility of warranty credits."