Sarasota, FL (WorkersCompensation.com) – Innovasis, a Salt Lake City-based developer and manufacturer of spinal implant devices, is facing a $12 million settlement to resolve allegations of violating the False Claims Act. The Department of Justice announced earlier this week that Innovasis executives Brent and Garth Felix agreed to the payout over accusations of paying kickbacks to spine surgeons to encourage the use of their implants.
Operating since 2004, Innovasis annually hosts the Spine Surgery Symposium, a prominent conference where top Orthopedic and Neuro Spine Specialists gather to discuss the latest advancements in spine surgery. However, from 2014 to 2022, the company allegedly provided improper financial incentives to more than seventeen neurosurgeons and orthopedic surgeons. These incentives, according to the DOJ, included shares of Innovasis stock, excessive consulting fees, and fees for intellectual property acquisitions and licenses, which were billed to federal payers.
Additionally, Innovasis is accused of offering luxury perks to the surgeons, their families, and staff, such as first-class airfare, high-end meals, and branded ski jackets during the annual symposium at the Deer Valley luxury resort. These perks, viewed as rewards for using Innovasis products, included expensive gift baskets as well.
The settlement detailed how consulting fees paid by Innovasis were significantly above market value, and in some instances, were paid for work that was never conducted. Similarly, payments for intellectual property were made without adequate documentation, such as patent applications or drawings, and the purchased information was not utilized for any meaningful product development.
The case was brought to light by whistleblower Robert Richardson, a former Regional Sales Director for Innovasis. Under the qui tam provisions, Richardson will receive $2.2 million as his share of the settlement recovery.
U.S. Attorney Leigha Simonton of the Northern District of Texas emphasized the importance of unbiased physician recommendations in maintaining the integrity of the healthcare system. “Any time we learn that physician recommendations are being corrupted by improper financial inducements, we will seek to hold those involved accountable,” she stated.
The settlement resulted from a coordinated effort between the Health and Human Services Office of Inspector General (HHS-OIG), the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Northern District of Texas.