On May 19, 2021, the Department of Justice (DOJ) announced a civil settlement in the Eastern District of Pennsylvania with Medicrea International, a French medical device manufacturer, along with its U.S. affiliate, Medicrea USA, Inc., to resolve alleged violations of the Anti-Kickback Statute as well as Open Payments Program violations.
The federal settlement resolves allegations that Medicrea violated the Anti-Kickback Statute by providing items of value to U.S.-based physicians in the form of meals, alcoholic beverages, entertainment and travel expenses as an inducement for the purchase of Medicrea’s spinal devices. The items of value were provided by Medicrea to the physicians during the course of a medical congress in Lyon, France in September 2013. Medicrea agreed to pay $1 million to the United States and participating states to resolve the Anti-Kickback allegations as well as an additional $1 million to the United States to resolve Open Payments violations for failing to report the transfers of value to the Centers for Medicare and Medicaid Services (CMS) as required by the Open Payments Program.
The Medicrea settlement is significant in that it represents the second settlement of an enforcement action under the Open Payments Program in the last 8 months and follows a March 2019 request from the Senate Finance Committee for HHS-OIG and CMS to investigate Open Payment Program non-compliance.
As the Medicrea case demonstrates, it is critical for life science manufacturers to ensure that engagements with healthcare providers comply with the requirements of the Anti-Kickback Statute and that all transfers of value are accurately and timely reported under the Open Payments Program.