3 orthopedic clinics accused of submitting false claims settle for $2M

Three orthopedic clinics have agreed to pay a combined $2.39 million to resolve federal and state False Claims Act allegations accusing the companies of intentionally billing federal and state healthcare programs for reimported osteoarthritis medications, known as viscosupplements, according to the Department of Justice.

Viscosupplements, including Synvisc, Orthovisc and Euflexxa , are reimbursed by federal healthcare programs such as Medicare and Medicaid at a set rate based on the average sales price of the domestic product, the DOJ said.

According to the DOJ, the clinics knowingly purchased deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal healthcare programs for the sake of profit. The reimported viscosupplements were not reimbursable by those programs.

"The reimported products allegedly included labeling in foreign languages and in English for additional uses not approved in the United States, which demonstrated that the product was reimported," the DOJ said. "Moreover, because the product was reimported, the government alleged there was no manufacturer assurance that it had not been tampered with or that it was stored appropriately."

To resolve the allegations, Orthopedic Associates of Northern California in Chico will pay $815,794; San Bernardino Medical Orthopaedic Group, doing business as Arrowhead Orthopaedics, in Redlands, Calif., will pay $971,903; and Reno Orthopaedic Clinic in Reno, Nev., will pay $602,335, according to the DOJ.

The allegations against the clinics were first raised in a lawsuit filed against the clinics under the qui tam, or whistleblower, provisions of the False Claims Act by a senior musculoskeletal specialty manager in the biosurgery division of Sanofi S.A., which manufactures Synvisc. The whistleblower will receive approximately $430,000 of the recovery proceeds.


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