Love might be blind, but whistleblowers aren’t.
That’s one of the two takeaways from a kickback allegation settlement announced March 22, 2023, by the U.S. Department of Justice.
The second takeaway should already be well known to you: The federal Anti‑Kickback Statute (“AKS”) prohibits soliciting or receiving anything of value in return for the referral of items or services covered by federal health care programs.
Pursuant to the announcement, neurosurgeon Dr. Sonjay Fonn and his fiancée, Ms. Deborah Seeger of Cape Girardeau, Missouri, and their professional companies, Midwest Neurosurgeons, LLC and DS Medical, LLC, agreed to pay the U.S. Government $825,000 to resolve a lawsuit alleging that they violated the False Claims Act by soliciting and receiving kickbacks from spinal implant companies.
The underlying False Claims Act case was originally filed by whistleblower physicians, Dr. Terry Cleaver, Dr. Kyle Colle, Dr. Scott Gibbs, Dr. Paul Tolentino, and Dr. Kevin Vaught, together with Paul Cairns and Certified Surgical Assistant Daniel Henson.
Although the original Complaint included a number of other alleged improper acts supporting FCA liability, the settlement was made in reference to the Complaint’s allegations that Dr. Fonn, Ms. Seeger, Midwest Neurosurgeons, and DS Medical solicited and received remuneration from spinal implant companies in return for arranging for the use of those companies’ products in Dr. Fonn’s surgeries, in violation of the Anti-Kickback Statute.
Violation of the AKS is one of the underlying routes to violation of the False Claims Act.
Specifically, it was alleged that Ms. Seeger’s entity DS Medical acted as the exclusive provider of various medical devices to Dr. Fonn’s practices for use in Dr. Fonn’s spinal surgeries. It was alleged that in connection with commercially insured cases, that allowed the defendants to capture profit between the manufactures’ price and the marked-up price obtained from the commercial insurers paying for the cases, and that in connection with Medicare and Medicaid patients, the defendants captured profits from reselling the devices to the hospitals which in turn billed government programs.
Note that as in connection with any such settlement, the claims settled were allegations only and there was no determination, or admission, of liability.
The physician whistleblowers practice together in Cape Girardeau at the Brain and NeuroSpine Clinic of Missouri, LLC and saw prior patients of Dr. Fonn. Mr. Henson, the Certified Surgical Assistant, was employed by Dr. Fonn for approximately 3 years.
As of the date of the Department of Justice’s announcement, the share to be paid to the whistleblowers had not yet been determined.