Judge Tosses Whistleblower’s Bone-Stim Charges

Eleven years ago, Jeffrey Bierman, a medical billing contractor from Missouri, filed a federal whistleblower lawsuit on behalf of the U.S. in federal courts in Massachusetts, accusing bone-growth stimulator manufacturers of both civil and criminal false claims. Bierman alleged that makers of the devices defrauded Medicare by selling, instead of renting the devices and coaching physicians to prescribe the devices for longer periods of time than was medically necessary.

On April 11, 2016, according to MassDevice, soon to be retired U.S. Federal Judge Rya Zobel ruled that Medicare’s reimbursement had nothing to do with how long the recommended treatment times were and dismissed the civil case against Zimmer Biomet subsidiary EBI and DJO Global, Inc.

“Because Bierman cannot point to any fact in this record to show that estimated lengths of need are material to Medicare’s decision to purchase DJO’s bone-growth devices, Bierman cannot sustain his False Claims Act action under this theory. Since materiality is also a condition of the state and local False Claims Act analogs under which Bierman has sued, Bierman likewise cannot sustain claims under those statutes, ” Zobel wrote.

The decision comes after a long judicial road that targeted almost all manufacturers of bone growth stimulators, including Reable Therapeutic which merged with DJO Global in 2007, Bioelectron which was acquired by Biomet’s EBI in 2008, Smith & Nephew, and Orthofix. The judge’s decision related specifically to the DJO and EBI lawsuits. Biomet had already paid nearly $6.1 million to settle with the U.S. Justice Department. The settlement resolves in part an allegation filed in a lawsuit by Yu Yue, a former product manager for EBI, in federal court in New Jersey. Orthofix paid out $42 million in 2012 to settle the fraud allegations. Smith & Nephew’s case is stayed pending review of a settlement, according to court documents.

According to court documents, the devices cost between $50 and $100 to manufacture and retailed for as much as $5, 000. Medicare reimbursed up to $4, 000 of that cost and allegedly brought in more than $400 million for the defendants from 1998 to 2000.