A civil health care fraud lawsuit has been filed against Life Spine Inc., as well as its founder and president, Michael Butler, and Vice President of development, Richard Greiber, for allegedly paying millions of dollars in kickbacks to surgeons for using their spinal implants, equipment, and other devices. According to the lawsuit, the surgeons who received kickbacks from Life Spine Inc. accounted for half of the company’s total sales from 2012-2018.
Life Spine Inc. is headquartered out of Huntley, Illinois and specializes in the development and manufacturing of devices used in spinal surgeries. This includes spinal implants and instruments under the Life Spine Products line.
In 2012, Butler and Greiber began aggressively recruiting surgeons to act as paid consultants for the company. Butler and Greiber also promised surgeons that any patent applications that were transferred to Life Spine Inc. would result in the related products being brought to market. However, these agreements were contingent on the surgeons’ continued use of Life Spine Products. In exchange, the surgeons received up-front intellectual property acquisition fees for their patent transfers, as well as royalties for sales from the patented products, and regular consulting fees.
Butler and Greiber continuously monitored the surgeons’ use of Life Spine Products. When the volume was considered too low, the surgeons’ were pressured to use more of these products during the surgeries and procedures of their patients. The royalties of their patented products were contingent on meeting these expectations, as well as their promised consulting fees and acquisition fees, forcing many of them to comply.
Overall, the kickback scheme was quite successful for Life Spine Inc. For six years, the scheme accounted for half of the company’s domestic sales and the use of Life Spine Products increased substantially for each surgeon that was recruited. Since the surgeons utilized the products on Medicare and Medicaid patients, this scheme also resulted in the submission of false claims to these organizations.
“As alleged, Life Spine and its senior management flagrantly ignored the law by paying surgeons millions of dollars in fees and royalties to get them to use Life Spine products during spinal surgeries. Kickbacks to doctors can alter or compromise their judgment about the medical care and services to provide to patients, and can increase healthcare costs. This office will continue to hold companies and the people who run them accountable when they make improper payments to doctors.”, stated Geoffrey Berman, a Manhattan U.S. Attorney.
This case resulted from the intervention of a private whistleblower lawsuit, which had been filed under the False Claims Act by BNHT LLC. BNHT LLC is represented by Seeger Weiss LLP.
To learn more about kickback schemes, Medicaid fraud, and Medicare fraud, visit the Jeffrey Newman Law Whistleblower Help Center and blog!