United States Intervenes in Whistleblower Lawsuits Against Neurosurgeon and Spinal Implant Co.
The U.S. federal government has filed two complaints against a Michigan neurosurgeon (Dr. Aria Sabit), a spinal implant company (Reliance Medical Systems), two of that company’s distributorships (Apex Medical Technologies and Kronos Spinal Technologies), and the company’s owners (Brett Berry, John Hoffman, and Adam Pike), the U.S. Department of Justice announced on Monday. The complaints allege that Apex and Kronos paid physicians such as Sabit to induce them to use Reliance spinal implants in their surgeries.
Berry and Pike founded Reliance in 2006, and subsequently created more than 12 physician-owned distributorships that sold Reliance devices. Each of Reliance’s distributorships sold spinal implants ordered by their physician-owners for use in procedures the physician-owners performed on their own patients. The complaints allege that Reliance used one of its distributorships, Apex Medical, to funnel improper payments to Sabit for using Reliance spinal implants in his surgeries. According to the complaints, Sabit began using Reliance implants on his patients only after he acquired an ownership interest in Apex and started receiving payments from the sale of Reliance’s spinal implants. Apex allegedly paid Sabit $438,570 between May 2010 and July 2012, during which time Sabit used Reliance implants in approximately 90 percent of his spinal fusion surgeries. The government also alleges that these payments caused Sabit to perform medically unnecessary or excessive surgeries on certain patients who did not need the spinal implants.
The government further alleges that Reliance operated a second distributor, Kronos, in southern California, which made improper payments to two other physicians, Drs. Ali Mesiwala and Gowriharan Thaiyananthan. Allegedly, Reliance’s owners were recorded telling a potential Kronos investor that Reliance was formed as part of a plan to “get around” the federal Anti-Kickback Statute, which prohibits such improper payments, and that Reliance pays its physician-investors enough in the first month or two to “put their kids through college.”
The lawsuit against Dr. Sabit was originally filed by Drs. Cary Savitch and Gary Profett under the whistleblower provision of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government. The Act also allows the government to intervene in such cases, which it has elected to do in this case.
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 expose every kind of fraud against the 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.