USAO Sues Spinal Device Company and Executives Over Kickbacks

Earlier this year, it was announced by the United States Attorney’s Office for the District of Massachusetts that a civil health care fraud complaint has been filed against SpineFrontier, Inc. (SpineFrontier) and Impartial Medical Experts, LLC (IME). In addition to the companies, individuals within the companies have also been implicated – Kingsley Chin, the founder and CEO of SpineFrontier; Aditya Humad, the CFO of SpineFrontier; and Vanessa Dudley, Chin’s wife and the Business Administrator of IME – as have other entities owned/controlled by Chin.

According to the government’s Complaint in Intervention, SpineFrontier and the other defendants paid – and conspired to pay – kickbacks (i.e., sham consulting fees) through a third-party (IME). The lawsuit alleges that the defendants made these payments to surgeons to get them to use SpineFrontier’s product in spinal surgeries. Therefore, the government says that the defendants violated the Anti-Kickback Statute, causing federal healthcare programs to pay millions of dollars in false claims.

According to the Complaint, SpineFrontier made the payments through IME, which operates only with a Florida PO box and whose only employee is Dudley. Further, with respect to the conspiracy charges, the defendants told the surgeons that they could bill SpineFrontier and IME for “consulting” on a per-surgical case basis, regardless of the time, if any, spent on consulting.

The government alleges that SpineFrontier and IME allegedly did not set a limit on the number of times a surgeon could purportedly evaluate a SpineFrontier device, which resulted in the same physician being paid for submitting consulting hours on the same device over and over again. SpineFrontier made no effort to track, review, or assess feedback that surgeon-consultants provided. Often, the defendants paid surgeons ostensibly for consulting time even when surgeons had provided no product feedback whatsoever.

Civil Health Care Fraud Claim Settlements

In addition to the above-named defendants, the United States settled claims against five physicians, each of whom admits to seeking and obtaining kickbacks from SpineFrontier through IME for consulting work he did not perform. As part of the settlements, each physician admitted that either SpineFrontier, Chin or Human (in some cases more than one) gave specific instructions to bill “consulting” hours to SpineFrontier for each surgery in which he used a SpineFrontier device, regardless of whether any time was actually spent consulting.

Dr. F. Paul DeGenova, an orthopedic spine surgeon in Ohio, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $486,985.

Dr. Michael Murray, an orthopedic spine surgeon in New York employed by the Department of Veteran Affairs, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $330,668.

Dr. Joseph Shehadi, a neurosurgeon in Ohio, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $323,419.

Dr. Agha Khan, a neurosurgeon in Maryland, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $310,843.

Dr. John Atwater, an orthopedic surgeon who has worked in in Florida and Illinois, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $105,149.

Government Statements

“Kickbacks paid to surgeons as sham medical consultants, as alleged in this case, cheat patients and taxpayers alike,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Working with our law enforcement partners, we will continue to investigate kickback schemes that threaten the integrity of our federal health care system, no matter how those schemes are disguised.”

“Surgeons have a moral imperative to operate in a trustworthy, transparent manner. No less than people’s lives and safety depend on them. Today, five spine doctors from across the country admitted they prioritized payoffs over patients to enrich themselves and a Malden medical supply company, SpineFrontier, by shelving their ethics once hundreds of thousands of dollars in kickbacks were put on the negotiating table,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “The FBI aggressively pursues health care fraud because cases like this don’t just impact a few people. The cost of these egregious crimes is ultimately borne by all taxpayers.”

 

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