LivaNova: Speaker Fees to High-Referring Epilepsy Physicians

LivaNova USA agreed to pay $1.87 million in the LivaNova kickbacks case over allegations that it paid Georgia physicians speaking fees to induce referrals for implantation of its epilepsy device. According to the government, the paid physicians were among the device’s highest referral sources, and the supposed speaking and marketing events drew audiences made up primarily of the physicians and their own staff. The company allegedly paid doctors who already sent it business to speak largely to people who already worked for them.

The Justice Department announced the settlement on December 4, 2018. LivaNova USA, formerly Cyberonics, agreed to pay the United States and Georgia. The device at issue was its VNS therapy device for refractory epilepsy. The government’s case connected the manufacturer’s speaker payments to physician referrals and business payable by Medicare and Medicaid.

A former LivaNova employee brought the qui tam case, and the government joined it. The announcement said the employee would receive a share of the settlement. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

How Does Reimbursement Work for Medical Devices?

For implanted medical devices, Medicare generally includes the device’s cost in payment for the procedure. The hospital buys the product, while the physician can strongly influence which product the hospital uses. That division helps explain why a manufacturer would direct its payments toward the doctor who sends patients for implantation.

The Department of Health and Human Services Office of Inspector General describes implantable devices as physician preference items: physicians may strongly influence both the brand and the type of device. The hospital or surgery center is the institutional buyer, but the clinical recommendation can determine whose device gets bought. A manufacturer’s commercial relationship with the physician can therefore reach well beyond a fee paid for a presentation.

The LivaNova complaint put the reimbursement for each VNS implant, including associated physician and hospital services, at more than $20,000. It shows why the referral mattered financially: the physician’s decision could lead to an implant sale, hospital services and professional services paid for through health care claims.

In the government’s account, the alleged kickback was upstream of those claims. LivaNova paid the speaking fee. A physician referred a patient for implantation. The resulting care created the business the government said the payments were intended to induce.

A Speaker Program for the Speaker’s Own Staff

The government’s description puts the event’s stated purpose beside the recipient’s value to the company. A speaking fee presents the doctor as someone being paid to educate an audience. Here, the government alleged that the payment served another purpose: inducing implantation referrals.

What Evidence Is Needed to Prove Fraud?

For a speaker-fee case like this, we connect the physician payments and the purpose of the events to referral activity and the government-paid care that followed. An employee’s knowledge of how speakers were chosen or who actually attended can explain the relationship behind the fee.

We examine what the company expected from the event, who approved the payment and how the physician’s referral activity figured in those decisions. We then connect the account of the program to the implantation and payment history.

Someone who knows why a physician was selected can explain a decision that a payment amount by itself does not describe.

The Complaint Went Beyond Speaker Fees

Beyond the speaker fees described in the settlement announcement, the whistleblower’s complaint alleged conduct involving programming bills, direct patient sales pitches and devices from a reportedly defective manufacturing lot.

Programming Advice Aimed at the Highest-Paying Code

The complaint described what LivaNova allegedly taught at its VNS symposiums:

The alleged instruction connected a manufacturer-run event to the physician’s later claim for services. For an insider who heard the presentation, the billing message could be as important as the product information.

Paying for Access to Patients

The complaint also alleged a route straight to the patient:

That allegation follows a different route to the same treatment decision: payment to the medical professional, access to the patient, then a sales pitch for the device.

The complaint also alleged that LivaNova continued selling devices from a lot physicians had reported as defective, without notifying patients or physicians about the reported problems. That allegation concerned what the company knew about the product it continued to sell.

Why Are Kickbacks Illegal?

The Anti-Kickback Statute prohibits payments intended to buy referrals for care paid for by Medicare and Medicaid, as the Justice Department explained. In LivaNova’s case, the government alleged that speaking fees bought influence over referrals for epilepsy-device implantation.

The civil resolution addressed alleged violations of both the False Claims Act and the Georgia False Medicaid Claims Act. Georgia’s Medicaid program was part of the case because the alleged inducements reached care paid for with public money.

The government’s allegation put a manufacturer’s payment into the treatment decision, with the physician’s referral business as the reason for the fee.

What Are Some Examples of Kickbacks in Healthcare?

Payments for speaker events and post-market studies have both featured in device kickback allegations when the government or a whistleblower said the payments rewarded implant selection. The LivaNova case concerns epilepsy referrals. Separate Medtronic cases show the same commercial pressure in the pacemaker and defibrillator business.

In a Medtronic whistleblower complaint, the former employee alleged that paid dinner speakers sometimes spoke only briefly or gave no presentation at all. The complaint also alleged that sales representatives told physicians they would lose invitations to dinners and resort weekends unless they kept implanting Medtronic devices at high volume. Marketing and sales personnel allegedly tracked implant activity and sometimes removed physicians from invitation lists when it fell.

Continued access to the benefits allegedly depended on continued implant business. It gives a device insider a concrete comparison for understanding what a company expected in return for its physician payments.

The Justice Department’s account of a separate Medtronic case in December 2011 identified payments associated with post-market studies and device registries.

The programs had different names and activities. The recurring allegation was that a device company used physician compensation to influence whose product went into a patient.

You Saw What the Speaker Program Bought

If you worked with speaker payments, referral data or VNS billing instructions, speak to one of our Whistleblower Experts about what the company expected physicians to do. We work beside you to build your strongest medical device whistleblower case, bring in medical device fraud whistleblower lawyers who understand physician compensation, and stay with you throughout the case.