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Guttman, Freidin & Celler Guttman, Freidin & Celler Whistleblower Group

Florida Medical Device Company Will Pay $16 Million To Resolve False Claims Act Whistleblower Claim


According to a report from Reuters, a medical company will pay $16 million to resolve a False Claims Act lawsuit filed by a whistleblower. Arthrex Inc., a Southwest Florida medical device manufacturer, allegedly paid a medical professional (orthopedic surgeon) in Colorado several million in illegal kickbacks to use and recommend its products. In this article, our Florida healthcare billing fraud lawyers provide a more detailed overview of the settlement and explain the key things to know about whistleblower rights under the False Claims Act (FCA).

DOJ Settlement: False Claims Act Violations in the Form of Illegal Kickbacks 

Originally founded in Germany, Arthrex Inc. is a global medical device manufacturer with a main headquarters in Naples, Florida. The core of the company’s business model is the manufacture and distribution of certain medical devices that are frequently used by orthopedic surgeons.

On November 8th, 2021, the United States Department of Justice (DOJ) announced that the company has agreed to settle a False Claims Act case for $16 million. The DOJ alleges that Arthrex Inc. paid kickbacks to an orthopedic surgeon in Colorado—thereby fraudulently billing Medicare.

More specifically, Arthrex Inc. allegedly made royalty payments to orthopedic surgeons whenever that medical professional used or recommended its products. These types of referrals (kickbacks) are unlawful when billing federal health programs, such as Medicare and Medicaid. 

A Whistleblower Filed the Lawsuit to Stop the Fraud (Will Receive $2.5 Million) 

Medical billing fraud is notoriously complex. In many cases, federal officials only become aware of healthcare billing issues—including unlawful kickbacks—because of disclosures from insiders. In this case, the initial lawsuit was filed by a whistleblower. A whistleblower named Joseph Shea filed a qui tam claim against Arthrex Inc. in a federal court in Massachusetts alleging health billing fraud.

Qui tam lawsuits are a type of whistleblower claim that can be filed under the False Claims Act. In effect, a qui tam lawsuit allows an employee, independent contractor, or any other individual with inside information of fraud against the government to take action to recover funds on behalf of the government.

When a qui tam claim is successful, the whistleblower who initiates the lawsuit is entitled to a share of the compensation of the funds recovered by the government. In this case, the DOJ has confirmed that the whistleblower will receive an award $2.5 million—or 15.6 percent of the total funds recovered on behalf of the federal government as part of the False Claim Act enforcement action. 

Get Help From a False Claims Act Lawyer in South Florida

At Guttman, Freidin & Celler, our Florida False Claims Act attorneys have deep experience representing whistleblowers in complex healthcare billing fraud cases. Our firm will protect your rights and help you get justice . If you have any questions about your rights or your options, we are here to help. Contact us today to set up your free, strictly confidential initial consultation. We provide nationwide representation in False Claims Act cases.


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