Boston Scientific to Settle Fraud Claims for $30M; Whistleblower to Get $2.25M

Boston Scientific Corp. and its subsidiaries, Guidant LLC, Guidant Sales LLC and Cardiac Pacemakers Inc. (Guidant), have agreed to pay $30 million to settle allegations that Guidant knowingly submitted or caused the submission of false claims to the Medicare federal health program, the Justice Department announced yesterday. The government alleged that Guidant knowingly sold defective heart defibrillators to health care facilities that in turn implanted the devices into Medicare patients. 

The devices at issue are implantable defibrillators, which are used in patients at risk of cardiac arrest due to an irregular heartbeat.  The devices are surgically implanted into patients’ chests, and when the devices detect an irregular heartbeat, they send an electrical pulse to the heart to “shock” it back to its normal rhythm.  The government’s complaint alleged that two lines of implantable cardiac devices manufactured and sold by Guidant, known as the Prizm 2 and the Renewal 1 and 2, contained a defect that rendered the device ineffective.

Guidant allegedly learned as early as April 2002 that the Prizm was defective. Nevertheless, the company continued to sell its remaining stock of the old, defective versions of the devices.  The government alleged further that, as Guidant learned about the cause of the defect, it took steps to hide the problem from patients, doctors and the Food and Drug Administration (FDA). 

The lawsuit was originally filed by James Allen, a recipient of one of the defective devices, under the whistleblower provision of the False Claims Act.  The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Allen will receive $2.25 million as his portion of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who uncover fraud of every kind perpetrated against our government including, health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.