St. Jude Medical settles with Justice Department over illegal incentives
by Rupa Shenoy, Minnesota Public RadioSt. Paul, Minn. — Little Canada-based medical device manufacturer St. Jude Medical yesterday agreed to a $3.7 million dollar settlement with the Justice Department.
The Justice Department alleged St. Jude paid illegal kickbacks to two hospitals in Ohio and Kentucky.
The government said the kickbacks served as incentives for the hospitals to buy more of St. Jude's heart devices.
Federal officials alleged many of the illegal payments came in the form of retroactive rebates.
They said the kickbacks resulted in false claims to federal health care programs, in violation of the False Claims Act.
In a statement, St. Jude said it agreed to the settlement in order to avoid the potential costs and risks of litigation.
The company emphasizes it has not admitted wrongdoing -- and it points out that the alleged illegal practices in question happened more than five years ago.
