Medtronics Settles for $9.2 Million In Alleged Kickback Case

F.J. Thomas

Minneapolis, MN ( – The Department Of Justice recently announced a $9.2 million settlement to resolve allegations of improper payments made to a South Dakota neurosurgeon.

Medical technology company Medtronics agreed to pay $8.1 million to settle allegations of violating the False Claims act by paying kickbacks to South Dakota neurosurgeon, Wilson Asfora, M.D. for using their products in surgeries. To resolve allegations of violating the Open Payments Program by failing to report all payments made to Asfora, Medtronics agreed to pay an additional $1.1 million.

Investigators allege that Medtronics agreed to pay for expensive social events at the Carnaval Brazilian Grill, which is owned by Asfora, at his particular request. The CMS Open Payments Program as established under the Affordable Care Act, requires manufactures to fully disclose to CMS any payments or gifts paid to physicians. The settlement resolves allegations that Medtronic under-reported those payments.

The payments were purportedly in exchange for Asfora’s use of SynchroMed II, which is an implantable programmable pain medication pump made by Medtronics. The system is designed to eliminate systemic use of opioids while still relieving pain.

Medtronic’s SynchroMed system has been plagued with manufacturing issues causing it to suddenly shut down, increasing patient pain and triggering withdrawal symptoms. According to a report from Mass Device, there were 55 cases of the devices failing in 2011 for which Medtronic established a $35 million settlement fund in response.

In the fall of 2019, Asfora was involved in another case involving alleged kickbacks. Sanford Hospital System where Asfora performed his surgeries, agreed to settle for $20.25 million to resolve allegations of the False Claims Act. The case alleged that Asfora was performing medically unnecessary spinal surgeries involving hardware that he invented, and that the hospital had failed to take appropriate action after notice of such allegations.

Asfora is the defendant in yet another case filed in November 2019. That case alleges that Asfora, along with Medical Designs LLC, and Sicage LLC violated the False Claims Act in payment of kickbacks for using certain devices for surgeries. That case is currently pending.

HHS Deputy General Counsel and CMS Chief Legal Officer Brenna E. Jenny believes that the Open Payments Program will foster more transparency in healthcare manufacturing. Jenny indicated that cases such as this one may be under the radar, stating, “CMS looks forward to continued partnership with the Department of Justice to resolve allegations of manufacturers skirting their Open Payments obligations.”

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