Surgical Device Company Charged in Whistleblower Case Involving Kickbacks

The Justice Department this month intervened in two whistleblower cases involving SpineFrontier Inc., related entities and executives. It is alleged that kickbacks were paid to spine surgeons to induce them to use SpineFrontier’s surgical devices, a violation of the Anti-Kickback Statute (AKS).

The AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, TRICARE, and other federally funded programs. It is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.

It is alleged in the complaint that approximately surgeons were paid more than $8 million in sham consulting fees for product evaluations, which were, in reality, payments in exchange for using the devices. The surgeons, in turn, generated more than $100 million in revenue for SpineFrontier, according to the complaint.

SpineFrontier, which is located in Massachusetts, is a spinal implant and device company founded by Dr. Kingsley Chin. He also is founder and principal owner of KIC Management Group and KICVentures, LLC, which operates SpineFrontier and Impartial Medical Experts, a purported consulting company which operates only with a Florida post office box. Others named include Adiya Humad Chief Financial Officer for KICVentures and SpineFrontier, and president of SpineFrontier; and Vanessa Dudley, Dr. Chin’s wife and IME’s only employee.

The complaint alleges that between October 2013 and December 2018, the defendants used the consulting company, of which Dr. Chin’s wife was the sole employee, to funnel kickbacks to surgeons. It is alleged that IME was used to shield the defendants and surgeons from government scrutiny by creating a false impression that surgeons were consulting through an independent third-party entity. Surgeons were paid $500 for a cervical procedure and $1,000 for a lumbar procedure, with the caveat that SpineFrontier’s devices were used.

It also is alleged that the surgeons often performed little or no work beyond implanting the devices, for which they were paid by insurance, and that the defendants neither collected, nor used, any feedback they received from the surgeons, and even paid them if they did not provide feedback.

The complaint names five surgeons who were paid between $13,775 to more than $243,000 in consulting fees. They agreed to pay a combined $1.56 million to settle civil healthcare fraud claims filed against them.

The whistleblower lawsuits originally were filed by Charles Birchall, Jr., a former employee of a KICVentures subsidiary; John Miller, a former sales manager at SpineFrontier; and Walter Bennett, a former sales representative at SpineFrontier. United States ex rel. Birchall, Jr. v. SpineFrontier, Inc. et al., No. 15cv12877 (D. Mass.) and United States ex rel. Doe v. SpineFrontier, Inc. et al., No. 15cv12908 (D. Mass.).  Click here to read the full complaint.

This whistleblower lawsuit wasn’t the first filed against SpineFrontier. In 2015, a former accountant filed a wrongful termination lawsuit against the company under the False Claims Act. Patricia Katz alleged that she was fired after telling company executives of her concerns that the company’s tracking and tracing system of its medical devices were in violation of federal safety standards.

In 2016, both parties agreed to dismiss the case after stipulating that the U.S. Food and Drug Administration did not find SpineFrontier in violation of the law, although it did issue a public warning letter to the company and its president.

The Health Law Offices of Anthony C. Vitale has a long track record of assisting clients in criminal matters. If you have any questions contact us at 305-358-4500 or email us at info@vitalehealthlaw.com.

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The Health Law Offices of Anthony C. Vitale

The Health Law Offices of Anthony C. Vitale

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