Life Spine charged in alleged kickback scheme
A Huntley-based manufacturer of medical devices and equipment used in spinal and joint surgeries faces federal fraud charges in New York accusing it of providing kickbacks to doctors who used their products.
The lawsuit, filed Tuesday in the U.S. Court for the Southern District of New York, charges Life Spine, as well as its Founder, President and CEO Michael Butler, and Vice President of Business Development Richard Greiber, with violating the False Claims Act for paying kickbacks in the form of millions of dollars in consulting fees, royalties and intellectual property acquisition fees to surgeons to induce them to use the company's spinal implants, devices, and equipment.
The complaint states that approximately half of Life Spine's total domestic sales of spinal products from 2012 through 2018 were a result of the kickbacks.
The lawsuit also alleges surgeons who used Life Spine Products during procedures performed on Medicare and Medicaid patients submitted false claims to Medicare and Medicaid.
The lawsuit stems from an investigation involving the U.S. attorney's office, FBI, and Health and Human Services Office of the Inspector General, after a separate whistle-blower lawsuit filed in the New York court.
The complaint charges Life Spine "aggressively recruited surgeons who had the potential to use a high volume of Life Spine products" to serve as paid consultants or transfer patents to the company in exchange for payments and promised support to bring the surgeons' new products to market. The lawsuit claims Butler oversaw company operations, while Greiber was involved in selecting and approving surgeons who served as paid "consultants" from 2012 to 2015.
"As alleged, Life Spine and its senior management flagrantly ignored the law by paying surgeons millions of dollars in fees and royalties to get them to use Life Spine products during spinal surgeries," said Manhattan U.S. Attorney Geoffrey S. Berman.
Life Spine officials said in a statement released Thursday that they "are engaged in discussions and look forward to resolving the matter." The statement did not directly address the allegations.
The case is being handled by the office's Civil Frauds Unit T.