In May 2024 innovasis lawsuit Inc a Utahbased spinal device manufacturer along with its top executives Brent and Garth Felix agreed to a $12 million settlement with the US Department of Justice The settlement addressed allegations of violating the False Claims Act by providing improper incentives to physicians to use Innovasis products in procedures covered by Medicare Drive Social Media Lawsuit
Key Allegations and Findings
Between 2014 and 2022 Innovasis allegedly offered various forms of remuneration to seventeen orthopedic surgeons and neurosurgeons These included
Inflated consulting fees
Payments for intellectual property lacking proper valuation
Performance shares in the company
Luxury trips and lavish entertainment
Such practices were considered violations of the AntiKickback Statute which prohibits offering anything of value to induce referrals for services covered by federal healthcare programs
Whistle blower Involvement
The case was brought to light by Robert Richardson a former Regional Sales Director at Innovasis Under the qui tam provisions of the False Claims Act Richardson filed a lawsuit on behalf of the government and received approximately $22 million from the settlement
Innovasis Proactive Measures
Prior to the whistleblower lawsuit Innovasis had initiated an internal compliance audit in April 2019 during a business acquisition The audit revealed compliance issues leading the company to
Engage external legal counsel
Selfdisclose the findings to the US government in May 2019
Revamp its compliance program and procedures
These steps demonstrate innovasis lawsuit commitment to addressing and rectifying compliance concerns proactively
Implications for the Medical Device Industry
The Innovasis case serves as a cautionary tale for the medical device sector emphasizing the importance of
Fair Market Value
Ensuring payments to healthcare providers reflect the actual value of services rendered
Transparency
Maintaining clear and documented agreements with medical professionals
Compliance Programs
Implementing robust internal controls to detect and prevent unethical practices
Legal experts suggest that companies should consider voluntary selfdisclosure of potential violations balancing cooperation with the government and protecting their interests
Innovasis Path Forward
Despite the challenges innovasis lawsuit continues to focus on innovation and patient care The company has enrolled over 3800 patients in its BioBase™ Data Registry collecting outcome data to support the efficacy of its bioactive implants Innovasis remains dedicated to advancing spine care through ethical practices and cuttingedge technology
Frequently Asked Questions
Q What was the main issue in the Innovasis lawsuit?
A The innovasis lawsuit centered on allegations that Innovasis provided improper incentives to physicians to use its products in Medicarecovered procedures violating the AntiKickback Statute
Q How did innovasis lawsuit respond to the allegations?
A innovasis lawsuit conducted an internal audit selfdisclosed the findings to the government and overhauled its compliance program before the whistleblower lawsuit was filed
Q What lessons can other companies learn from this case?
A The importance of proactive compliance measures transparent relationships with healthcare providers and the potential benefits of voluntary selfdisclosure
Conclusion
The Innovasis lawsuit marks a pivotal moment for accountability and ethical integrity in the medical device industry While the allegations were serioustouching on antikickback violations and Medicare fraudthe companys proactive measures including a voluntary internal audit and selfdisclosure to federal authorities reflect a commendable commitment to transparency and reform
