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BOSTON – The U.S. Attorney’s Office announced today that Dr. Jeffrey R. Carlson of Newport News, VA has agreed to pay $1.75 million to resolve allegations that he accepted kickbacks from SpineFrontier, Inc., a Massachusetts-based medical device manufacturer.
Dr. Carlson, an orthopedic surgeon, is the sixth surgeon who has agreed to settle with the government relating to his interactions with SpineFrontier. In March, the government filed a False Claims Act complaint against SpineFrontier and its executives, alleging that SpineFrontier paid kickbacks to spine surgeons itself and through a sham third-party entity, Impartial Medical Experts, LLC, which was owned and controlled by SpineFrontier’s founder and CEO, Kingsley R. Chin.
As part of the settlement agreement announced today, the government contends that Dr. Carlson received kickbacks in the form of sham consulting fees that he submitted through Impartial Medical Experts. Under the settlement agreement, Dr. Carlson admits that he estimated his purported consulting hours based on the number of times he used a SpineFrontier product in a given month, as opposed to tracking actual time he spent consulting. Dr. Carlson further admits that he cannot document the consulting hours he submitted for payment to SpineFrontier and Impartial Medical Experts. In addition, Dr. Carlson sought and received consulting payments from SpineFrontier for time he spent during his surgical procedures, for which Medicare and other federal health care programs were already paying him.
Dr. Carlson also admits to accepting free meals from SpineFrontier, for himself and his surgical staff, on almost every day that he performed a surgical procedure with a SpineFrontier product. In total, SpineFrontier provided Dr. Carlson and his staff meals that cost thousands of dollars.
“This settlement continues our commitment to ensuring that doctors choose medical products solely on the basis of what is best for the patient, and not what is best for the surgeon’s pockets. For their part, manufacturers must play by the rules and compete on a level playing field,” said United States Attorney Andrew E. Lelling. “We will investigate any doctor, like Dr. Carlson, who accepts money from a device manufacturer simply for using that company’s products.”
“By accepting kickbacks in the form of sham consulting fees, along with thousands of dollars in free meals, Dr. Jeffrey Carlson not only put his own financial well-being ahead of his patients, but he also cheated taxpayers who were footing the bill for his surgical procedures,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Today’s settlement illustrates the FBI’s continued commitment to working with our law enforcement partners to root out those trying to undermine our healthcare system.”
“Sham consulting arrangements seek to undermine the integrity of the medical decision-making process,” said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Patients in government healthcare programs, and the taxpayers funding these programs, expect surgeons to make decisions based on the best interest of their patients without the cloud of improper financial incentives. Today’s settlement sends a clear message that these types of financial arrangements will not be tolerated.”
Chris Algieri, Special Agent in Charge, VA Office of Inspector General, stated “The Veterans Choice Program allows Veterans to receive care from a community provider. The program is undermined when providers put their financial interests ahead of our nation’s Veterans. VA OIG will continue working with agency partners to ensure VA healthcare programs are protected.”
“We applaud the Department of Justice for addressing the issue of fraudulent activity against not only the military patient population, but also the American public at large,” said Army Lt. Gen. Ronald Place, Director of the Defense Health Agency. “We will continue working together with federal, state, and local authorities to pursue any and all who would seek to take advantage of the health care needs of our people for their personal gain.”
U.S. Attorney Lelling, FBI Boston SAC Bonavolonta, HHS-OIG SAC Coyne, VA OIG SAC Algieri, and DHA Director Army Lt. Gen. Place made the announcement today. Assistant U.S. Attorneys Abraham R. George, David J. Derusha, Patrick M. Callahan and Steven T. Sharobem of Lelling’s Office handled the investigation.