Entellus Medical: Benefits to a Practice Leader Who Directed Device Use

In the Entellus Medical kickback settlement, Stryker agreed to pay $1.2 million to resolve allegations that Entellus provided cash and all-expense-paid trips to a practice leader in return for directing physicians to use its sinus-surgery devices and perform more procedures. The alleged benefits went to the person who could tell other doctors what to use. For a physician hearing those instructions, or a sales employee watching the account grow, the relationship behind that authority is the story.

Entellus manufactures products used in sinus surgery. The Justice Department’s December 8, 2021 announcement described the device arrangement alongside a separate laboratory kickback arrangement involving the same practice leader. A former physician-employee brought the False Claims Act qui tam case.

The Practice Leader Who Directed Device Use

The government alleged that Entellus paid for influence over an employed physician group. The recipient was the founder and owner of Milton Hall Surgical Associates, known as the ENT Institute. Between 2014 and 2018, he was a non-practicing physician serving as the practice’s CEO and medical director, with approximately 12 to 18 physicians working across North Georgia.

That role put him above the doctors making treatment decisions. According to the government, he used his authority to direct their device choices and testing orders, often over their objections. The alleged Entellus arrangement called for those physicians to use the company’s sinuplasty devices exclusively and to increase the number of sinuplasty procedures performed on the practice’s patients.

Choosing Entellus over its competitors directed the practice’s existing purchases toward the company. Performing more sinus procedures increased the supplies the practice ordered.

The employment relationship gave the alleged arrangement its reach. A manufacturer could reward one executive while the directions reached the physicians working beneath him. The doctors’ objections matter because they show the disagreement inside the practice: the person receiving the alleged benefits also held authority over the people expected to carry out the decisions.

How Does Reimbursement Work for Medical Devices?

For many devices, Medicare includes the device cost in its payment for the covered procedure. In the Entellus account, the practice ordered the devices for sinus surgeries performed at the practice.

In the Entellus allegations, the cash and travel allegedly reached the practice leader, his directions reached the employed physicians, and the resulting device use and procedures supplied business to the manufacturer.

Why Is Kickback Illegal?

The Anti-Kickback Statute prohibits knowingly paying or taking benefits to steer business covered by federal health care programs. A payment for influence can redirect clinical decisions while taxpayers pay for the resulting care.

The 2020 Journal of Forensic and Investigative Accounting article A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud explains that the law reaches indirect compensation and economic relationships more complicated than a simple payment for services. Applied to the Entellus allegations, that perspective puts the practice leader’s authority beside the benefits he allegedly received. The commercial value of the arrangement depended on what he could cause other physicians to do.

Stryker’s Compliance Team Chose Not to Renew

After Stryker acquired Entellus on December 7, 2017, its compliance personnel flagged the consulting arrangement and elected not to renew it, according to the Justice Department.

It was called consulting. The alleged return was a boss telling his doctors which devices to use and to perform more procedures. The buyer’s own compliance team chose not to renew the deal.

A compliance employee may know what prompted the review. A sales employee may know what the company expected from the practice. A physician may know how the directions arrived and what happened when someone objected. We examine those accounts together with the agreement and the decision not to renew it, because each can explain a different part of the same relationship.

The Separate NextHealth Laboratory Arrangement

The practice leader’s approximately $3 million civil resolution also covered allegations involving NextHealth, a Dallas medical laboratory. The government alleged that he directed employed physicians to order toxicology and genetic tests despite their objections that the tests were not medically necessary.

NextHealth allegedly paid him 50% of the revenue generated by those tests as commissions. The government said the laboratory arrangement ended as physician complaints about unnecessary testing increased. That account again places the benefit with the practice leader and the pressure with the doctors below him, but the purchases were laboratory tests and the paying company was NextHealth.

The Justice Department’s announcement separately reported that the practice leader pleaded guilty to health care fraud on October 21, 2021, concerning the NextHealth conduct. That plea concerned laboratory testing, while Entellus’s agreement resolved the civil device allegations.

What Are Some Examples of Kickbacks in Healthcare?

Device kickback cases include consulting payments, royalties and travel benefits tied to product selection or use. Entellus illustrates alleged benefits to a leader who controlled other physicians. Other cases show how companies monitored the purchasing behavior they expected those benefits to produce.

In Life Spine’s 2019 civil settlement, the company admitted generating management reports that compared payments to surgeons with their use of its spinal products.

In Arthrex’s 2021 settlement, the government alleged that royalty payments ostensibly for an orthopedic surgeon’s contributions to SutureBridge and SpeedBridge induced product use and recommendations, causing false Medicare claims.

Device companies rely on physicians to help design products, teach techniques and evaluate instruments. Those relationships put commercial contracts close to clinical choices. The useful evidence is what the company expected in return, what work the physician actually did and how the company responded when purchasing changed. In the Entellus allegations, the added feature was a recipient whose authority extended across an employed group.

What Evidence Is Needed to Report Fraud?

For an arrangement like the one alleged here, the useful evidence connects manufacturer benefits to the practice leader’s directions, the physicians’ response and the resulting procedures and claims. We work with insiders to understand how those pieces fit in their own business.

The agreement may describe consulting while the physicians describe pressure to use a product. We examine that gap with you, drawing on what you know about the payments, directions and review inside the business.

The Entellus case began with a former physician-employee of the practice. That vantage point matters alongside the manufacturer’s sales and compliance records: an insider can explain how a commercial arrangement reached the treatment decisions made for patients.

How Much Is a Whistleblower Claim Worth?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Heard the Directions Inside the Practice

If you saw device benefits turn into pressure on physicians, speak to one of our Whistleblower Experts about how the benefits reached the practice. We use your knowledge of the practice, the sales account or the compliance review to build your strongest medical device kickback case. We bring in medical device fraud whistleblower lawyers who understand payments tied to clinical decisions and stay beside you through the pursuit of a recovery.