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CareFusion to Pay $40.1 Million for Kickbacks to Doctor

hand using chloraprep on a patient's abdomen

CareFusion Corp. has agreed to pay the government $40.1 million to settle allegations that it violated the False Claims Act by paying kickbacks and promoting its products for uses that were not approved by the FDA, the Justice Department announced today.  CareFusion, a California-based medical technology company, sells pharmaceutical products, including antiseptic products sold under the trade name ChloraPrep.

The settlement resolves a lawsuit filed by Dr. Cynthia Kirk, a former vice president of regulatory affairs for the Infection Prevention Business Unit of CareFusion, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to file suit on behalf of the government and to share in any recovery.  Her share in this case is $3.26 million.

“When companies pay kickbacks to doctors, especially doctors involved in setting standards for the health care industry, they undermine the integrity of the health care system,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Corrupting the standard-setting process through kickbacks can affect the health care treatment choices that doctors and hospitals may make for patients.”

The settlement resolves allegations that, under agreements entered into in 2008 by CareFusion’s predecessor, CareFusion paid $11.6 million in kickbacks to Dr. Charles Denham while Denham served as the co-chair of the Safe Practices Committee at the National Quality Forum, a non-profit organization that reviews, endorses and recommends standardized health care performance measures and practices.  The government contends that the purpose of those payments was to induce Denham to promote the purchase of ChloraPrep by health care providers.  ChloraPrep has been approved by the Food and Drug Administration for the preparation of a patient’s skin prior to surgery or injection.

This settlement also resolves charges that for two years, CareFusion knowingly promoted the sale of ChloraPrep off-label uses, some of which were not medically accepted indications, and made unsubstantiated claims about the appropriate uses of ChloraPrep.

“Health care fraud drives up the cost of health care and jeopardizes the strength of our health care system,” said U.S. Attorney for the District of Kansas Barry Grissom.  “This case demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, the disabled and the most vulnerable among us.”

Since January 2009, the Justice Department has recovered a total of more than $17 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The lawsuit is captioned United States ex rel. Kirk v. CareFusion et al., No. 10-2492 (D. Kan.)

By Larry Bodine

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