Law360, Washington (April 28, 2015, 6:48 PM ET) A former accountant at a medical device company said in a threecount complaint in Massachusetts federal court Tuesday she was fired for
bringing False Claims Act violations to management’s attention, even though she should have been protected as a whistleblower.
Patricia Katz accused Beverly, Massachusettsbased SpineFrontier Inc. of violating state and federal false claims acts and Massachusetts common law by allegedly firing her — despite consistently strong performance reviews — after she repeatedly reported potential FCA violations to company brass.
Just before her termination in March 2012, Katz had taken her reporting to another level, sending the U.S. Food and Drug Administration an email asking if certain SpineFrontier practices were against federal regulations, though she did not name the company in her correspondence with the government, according to the complaint. She had previously raised her concerns only with her work supervisors.
Katz, of Arlington, Massachusetts, said her former employer ran a regulatory scheme in which its devices were misbranded, in violation of FDA regulations, then sold to health care providers, including some who were reimbursed by the government through Medicare.
Katz said Tuesday the company retaliated against her because of her whistleblowing and because she was was willing to report misconduct to government officials, despite instructions from company officials to drop the matter.
“SpineFrontier knew that its devices were misbranded and adulterated, but marketed and sold them anyway despite the prohibitions of federal law,” she said. “This was a violation of the False Claims Act … that Katz attempted to stop. When it became clear to SpineFrontier that Katz would not let the matter drop and that she was willing to speak with the FDA about it, she was immediately terminated.”
Katz began working as a senior accountant at SpineFrontier in February 2011, she said. Through the next year, she received two positive performance reviews, with accompanying cash and stock bonuses, she said. Her termination letter, presented on her first work day following the revelation she’d contacted the FDA, contradicted prior reviews to establish “pretextual” excuses for her firing, she said.
Through the course of her employment, Katz discovered SpineFrontier was allegedly failing to track and trace implantable medical devices as required by law, she said. She first brought her concerns to Chief Financial Officer Aditya Humad, who brushed off the complaint, saying the regulations were too cumbersome, according to Katz.