A settlement has been reached in a whistleblower class action lawsuit brought against Guidant LLC, a wholly owned subsidiary of Boston Scientific Corp. Guidlant is accused of inflating the cost of replacement pacemakers and defibrillators to federal health care programs.
The whistleblower will receive a $2.3 million share of the government's recovery.
Originally filed in September 2003, the United States alleged that Guidant inflated the cost of replacement pacemakers and defibrillators to federal health care programs by knowingly failing to grant warranty credits and rebates to hospitals for pacemakers and defibrillators that were explanted while covered under a product warranty or another credit program. The government also alleged that Guidant actively promoted the longevity and reliability of its pacemakers and defibrillators to physicians in an effort to convince them to purchase Guidant products over competing devices. Guidant reinforced these claims by touting the generous credits available should a device need to be replaced while covered under warranty. At the same time, Guidant allegedly was fully aware that it failed to grant an appropriate credit to the purchaser of the device in a large number of cases where a product failed while still under warranty. As a result, the United States contends that Guidant submitted invoices to Department of Veterans Affairs hospitals and Department of Defense facilities that overstated the cost for a replacement pacemaker or defibrillator. In addition, Guidant’s alleged submission of inflated invoices for pacemakers and defibrillators to private hospitals caused these hospitals to overstate the cost of these devices on hospital cost reports, resulting in Medicare paying more for pacemakers and defibrillators than it otherwise should have.
