Malden company paid $8M in kickbacks to spinal surgeons, feds say

A Malden medical device company paid $8 million in kickbacks to dozens of surgeons in the form of sham consulting fees from its own third-party company, resulting in $100 million in revenue, feds say.

SpineFrontier, based in Malden, Impartial Medical Experts based in Florida, and each company’s executives are named in a lengthy civil health care fraud complaint Thursday from U.S. Attorney Andrew Lelling’s office. The companies are also accused of causing federal health care programs to pay millions of dollars in false claims.

Five spine surgeons across the country, including a Veterans Affairs doctor in New York, also agreed to settle with feds for a combined $1.5 million over their kickbacks.

“Surgeons have a moral imperative to operate in a trustworthy, transparent manner,” Joseph Bonavolonta, FBI Boston special agent in charge said in a statement. “… The cost of these egregious crimes is ultimately borne by all taxpayers.”

Feds named two executives from SpineFrontier — founder Kingsley Chin and CFO Aditya Humad — and the sole employee of IME, Vanessa Dudley, Chin’s wife. SpineFrontier did not respond to a request for comment. Dudley said Thursday she was not aware of the complaint and said she would contact her counsel.

Authorities say SpineFrontier obscured its ties to IME, which allegedly paid 35 surgeons “consulting” fees between 2013-18 for their medical devices used largely in spinal surgeries, even when the surgeons submitted “trivial” or no feedback on the consulting forms.

Surgeons were allegedly paid on the number of surgeries they performed with SpineFrontier products, with amounts varying between $500 and $1,000 for each surgery using a device.

Feds allege the companies’ executives worked with surgeons to keep the fraud in check with pre-determined kickback fees, as Chin in 2015 reduced one doctor’s “consulting” hours to match IME’s per-surgery formula.

“If there is no oversight then we all can be accused of a sham system to pay surgeons for business,” Chin wrote to executives and the surgeon.

Despite keeping each kickback in line with the formula, SpineFrontier and IME set no limit on the number of times surgeons could enter submissions, the complaint alleges. Surgeons often submitted “consulting” for the same device hundreds of times even when the device was “relatively rudimentary,” such as a “pedicle screw” used in spinal surgeries, feds said.

SpineFrontier also allegedly made no effort to catalog, review or asses the feedback which surgeons sometimes made no effort to review at all.

Feds intervened in two private whistleblower suits from 2015 filed under seal in connection with Thursday’s complaint.

from Boston Herald https://ift.tt/3axmRLU