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The Department of Justice (DOJ) announced yesterday that EBI LLC, which does business under “Biomet” names, has agreed to pay $6 million to settle allegations that it violated the False Claims Act by paying kickbacks and by billing Medicare and other federal health care programs for refurbished bone growth stimulators. The government alleged that EBI paid staff members of physician offices under personal service agreements to induce physician orders for order bone growth stimulators.

Yu Yue, a former EBI product manager, initiated the lawsuit in a federal court in New Jersey by filing a qui tam whistleblower complaint. The whistleblower will receive a share of the settlement in an amount that has not been determined.

This settlement provides another reminder of the need for medical device companies, physicians and other health care providers to carefully structure their service agreements and other compensation arrangements involving referral sources.

Click here to read the full press release.