C.R. Bard Settlement Results in $48M Payment For Kickback Scheme

C.R. Bard has agreed to settle a whistleblower lawsuit for $48.26 million, resolving charges that the company was paying out illegal kickbacks to doctors who used its radioactive “seeds” to treat prostate cancer.  

On May 13, the Department of Justice (DOJ) announced a C.R. settlement over alleged violations of the False Claims Act. The DOJ accuses the company of giving illegal kickbacks to doctors who used its brachytherapy seeds to treat prostate cancer patients.

According to the charges, which were brought in the form of a whistleblower lawsuit by a former manager of the brachytherapy contracts, C.R. Bard paid doctors and hospitals to use the brachytherapy seeds in the form of free medical supplies, grants, rebates, conferencing fees, and marketing assistance. Because the hospitals billed Medicare for the seeds, the DOJ accused the company of Medicare fraud. The illegal payments went from 1998 to 2006, the DOJ claims.

Under the qui tam provision of the False Claims Act, whistleblowers who report a false claim against the government may be entitled to receive a portion of any money that the government recovers. In return, the whistleblower must be the first to bring the case to the government’s attention, and must not publicize the claim until the Justice Department decides to prosecute the claim. The employee that brought this claim, Julie Darity, will receive $10,134,600 as part of the settlement.

“Illegal kickbacks in any form pervert our health care system, which is designed to insure that health care providers make decisions based solely on what is best for the patient,” said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia.

Brachytherapy involves radioactive metal “seeds” which are placed in a pattern inside the prostate with needles. The metal seeds create a cloud of radiation that conforms to the prostate and is tailored to attack and contain the cancerous cells.

The radioactive brachytherapy seeds came to the public’s attention in 2009, when the U.S. Nuclear Regulatory Commission (NRC), revealed that a so-called rogue cancer unit operating out of the Philadelphia VA Medical Center had botched at least 98 brachytherapy seed treatments out of 114 procedures. The investigation revealed some patients received radiation that was too weak, others had the seeds implanted in the wrong location, such as the bladder and the rectum.

The NRC found that there was no peer review, and that there were times when the staff in the cancer unit altered medical records to make it appear as though seed placement errors were actually part of the original medical plan. The unit, run by doctors from University of Philadelphia working for the VA under contract, was shut down in 2008 as part of the investigation. There was no information on whether the team had received illegal kickbacks from C.R. Bard to perform the procedures.