Two years after a whistleblower filed a qui tam lawsuit against three California orthopedic clinics for knowingly purchasing deeply discounted viscosupplements that were reimported from foreign countries and billed them to state and federal health care programs, the clinics agreed to pay $2.39 million to settle the cases.
Whistleblower Suit Against California Ortho Clinics Results in $2.39 Million Settlement
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On October 3, 2016, the Department of Justice (DOJ) announced that Orthopedic Associates of Northern California, located in Chico, California, will pay $815, 794; San Bernardino Medical Orthopaedic Group Inc., DBA Arrowhead Orthopaedics, headquartered in Redlands, California, will pay $971, 903; and Reno Orthopaedic Clinic, headquartered in Reno, Nevada, will pay $602, 335 to settle the charges.
According to the DOJ, the reimported products allegedly included labeling in foreign languages and in English for additional uses not approved in the U.S., “which demonstrated that the product was reimported. 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.”
“We are committed to maintaining the integrity of the health care system to ensure that patients receive drugs and devices that are safe and effective, and will take action against companies that take chances with the health of consumers in order to improve their own bottom lines, ” said Acting U.S. Attorney Phillip Talbert.
The whistleblower, John Blohm, filed the qui tam action under the False Claims Act in the U.S. District Court for the Eastern District of California on April 14, 2014. Blohm was a Senior Musculoskeletal Specialty Manager in the Biosurgery Division of Sanofi S.A., which manufactures Synvisc. Blohm will receive approximately $430, 000 of the recovery proceeds.
Viscosupplements, such as Synvisc, Orthovisc, and Euflexxa are injections approved by the FDA for the treatment of osteoarthritis pain in the knee. Viscosupplements are reimbursed by Medicare, Medicaid and other federal health care programs at a set rate based on the average sales price of the domestic product.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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