Heart Device Maker ELA Medical Pays $9.1M To Settle Kickback Allegations

Heart Device Maker ELA Medical Pays $9.1M To Settle Kickback Allegations

MIAMI -- Heart device maker ELA Medical Inc. will pay $9,178,000 to settle a False Claims Act lawsuit alleging that it paid kickbacks through a distributor to doctors to induce them to use the company's products, according to a settlement filed Nov. 1 in a Florida federal court (United States of America, ex rel. Tania Lee v. ELA, et al., No. 06-21230, S.D. Fla., Miami Div.).

Under the settlement filed in the U.S. District Court for the Southern District of Florida, ELA Medical will pay $485,000 in attorney fees and expenses to counsel for relator Tania Lee.  The U.S. government will pay Lee $1,927,380 for her share of the settlement.

In addition, ELA entered into a Corporate Integrity Agreement with the Office of Inspector General for the U.S. Department of Health and Human Services.

ELA, a division of the Sorin Group, makes cardiac pacemakers, defibrillators and other cardiovascular monitoring equipment.  According to the settlement agreement, in 2004 ELA entered into a sales representative agreement with Advanced Cardiac Consultants Inc. and three individuals employed by the distributor to market ELA devices to health care providers in South Florida. 

The settlement agreement says that from Jan. 1, 2004, to Dec. 31, 2007, ELA used Advanced Cardiac Consultants to pay kickbacks to one or more doctors or medical practices to induce them to implant pacemakers or defibrillators in patients in hospitals in Dade, Broward and Palm Beach counties in Florida.  The agreement says the kickbacks were in the form of gifts, meals and entertainment, tickets to sporting events, travel to medical conferences (some of them sponsored by ELA), travel to Costa Rica, fishing and boating trips, cash payments to a foundation owned by physicians and travel expenses for the spouses of doctors.

In 2006, Lee, a certified cardiovascular technician who worked as a technical service representative for ELA from 2003 through 2005, filed her qui tam complaint on behalf of the government.

Sorin announced in March that it has agreed in principle to settle the government's allegations.  It announced Oct. 22 that it had finalized the settlement.

Another False Claims Act lawsuit alleging the payment of kickbacks by ELA was filed in 2007 by Mary Jo Pfeifer, former director of finance and operations for ELA, in the District of Colorado.  On Sept. 17, Pfeiffer, the federal government and ELA asked the court to administratively close that case because they were close to a settlement (United States of America, ex rel. Mary Jo Pfeifer v. ELA Medical, Inc., et al., No. 07-1460, D. Colo., Denver Dist.).

[Editor's Note:  Full coverage will be in the Nov. 4 issue of Mealey's Emerging Drugs & Devices.  In the meantime, the settlement agreement is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #28-101104-016P.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

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For more information, call editor Tom Moylan at 610-205-1120, or e-mail him at tom.moylan@lexisnexis.com.