Yellowhammer Times

Exactech Inc., a medical device manufacturer based in Gainesville, Florida, has agreed to pay $8 million to settle allegations that it violated the federal False Claims Act. The case centers on claims that Exactech knowingly submitted or caused the submission of false claims for payment to Medicare, Medicaid, and the U.S. Department of Veterans Affairs related to allegedly defective knee replacement devices.

The settlement addresses two components of Exactech’s total knee replacement systems. According to the allegations, as early as January 2008, Exactech was aware that its finned tibial tray failed at a higher than acceptable rate but continued marketing and selling this component for use in surgeries covered by government healthcare programs until December 31, 2018. Additionally, it is alleged that from January 2019 onward, Exactech knew about premature failures in the polyethylene component used in certain Logic and Truliant knee replacement systems but still sold these products for use in government-funded surgeries through February 7, 2022.

“Today’s resolution reaffirms our commitment to protect the health and safety of patients,” said Prim F. Escalona, U.S. Attorney for the Northern District of Alabama. “Medical device manufacturers must ensure their medical devices, which may be implanted in patients’ bodies, meet the necessary standards of safety and effectiveness at all times.”

Hayes added: “Patients who need a medical device to enjoy their lives rely on device manufacturers to put patient safety first. When a manufacturer learns that its device is defective, it must promptly and transparently address the problem. We will hold companies accountable who knowingly sell defective devices.”

Under the terms of the agreement, Exactech will pay $8 million; $7.64 million will go to federal programs while states are expected to enter separate agreements with Exactech concerning a $360,000 state share. The settlement amount reflects an assessment of Exactech’s financial condition.

The civil settlement resolves claims brought under whistleblower provisions by Brooks Wallace, Robert Farley and Dr. Manuel Fuentes (in United States ex rel. Wallace v. Exactech) as well as Dr. Pasquale Petrera (in United States ex rel. Petrera v. Exactech). Whistleblowers involved in these cases will receive portions of the settlement: $1,329,360 for those from Alabama and $565,360 for Maryland.

This resolution resulted from cooperation among multiple agencies including the Justice Department’s Civil Division (Commercial Litigation Branch), U.S. Attorney’s Offices for both Northern District of Alabama and District of Maryland, with support from the Department of Health and Human Services Office of Inspector General.

Officials emphasized ongoing efforts against healthcare fraud using tools such as the False Claims Act; tips about potential fraud can be reported via 800-HHS-TIPS (800-447-8477).

Assistant U.S. Attorneys Don Long (Northern District of Alabama) and Matthew Haven (District of Maryland), along with Senior Trial Counsel Michael Hoffman (Civil Division), handled this matter.

It was noted that all resolved claims are allegations only; there has been no determination regarding liability.