A South Dakota neurosurgeon has agreed to pay $4.4 million to settle a False Claims Act suit against him and his two medical device distributors, the Department of Justice (DOJ) announced in a Monday news release.
A 2016 qui tam action, brought by relators Carl Dustin Bechtold and Bryan Wellman in the District of South Dakota, alleged that Wilson Asfora, owner of Medical Designs LLC and Sicage LLC, used his companies to operate kickback schemes to enrich himself. The United States, which took over as plaintiff in 2019, claimed that Asfora’s companies paid him profit distributions for using Medical Designs’ and Sicage’s devices in his surgeries and, in distributions of other manufacturers’ medical devices, split the profits with Asfora when he employed those manufacturers’ devices in surgeries.
Additionally, the U.S. alleged that Asfora received kickbacks from Medtronic USA Inc. in exchange for using Medtronic’s SynchroMed II infusion pumps, which are implants that deliver medications to patients. Medtronic agreed in a separate settlement on Oct. 29, 2020, to pay $8.1 to resolve these kickback allegations, which included that the company paid for more than 100 social events at a restaurant owned by Asfora to induce him into using Medtronic’s products in his surgeries.
The U.S. argued that apart from the kickbacks scheme being unlawful, the claims Asfora had submitted to federal health care programs were for medically unnecessary procedures.
Also as part of the settlement, Asfora and his companies will pay an extra $100,000 to settle claims that they failed to report to the Centers for Medicare & Medicaid Services such payments that Asfora allegedly received. As a further penalty, the defendants will be unable to submit claims and receive reimbursements from federal healthcare programs for six years.
“Fraud in the healthcare arena is taken very seriously by the Department of Justice,” acting U.S. Attorney Dennis R. Holmes for the District of South Dakota said in the DOJ release. “South Dakota is fortunate to have many honest and dedicated healthcare providers who strive daily to provide high quality services. Dr. Asfora and his companies violated the trust that so many others have worked hard to earn.”
The relators are represented by May, Adam, Gerdes & Thompson LLP and Joseph Greenwald & Laake PA. Asfora is represented by Cadwell Sanford Deibert & Garry LLP and Williams & Connolly LLP.
