Bloomberg News

Boston Scientific to Pay $9.25 Million in Whistleblower Case

September 26, 2011

(Updates with company comment in sixth paragraph.)

Sept. 26 (Bloomberg) -- Boston Scientific Corp.’s Guidant LLC unit will pay $9.25 million to settle a whistleblower’s claim that the company over-billed the U.S. and private hospitals for heart pacemakers and defibrillators.

The U.S. Justice Department said today that the accord ends a lawsuit filed against Guidant by a former sales agent, Robert A. Fry, in federal court in Nashville, Tennessee. He will receive more than $2.3 million from the settlement.

Guidant allegedly reneged on credits owed to the U.S. Department of Veterans Affairs for replacement of units still under warranty and is accused of over-charging hospitals for the devices, causing them to over-bill Medicare, according to an e-mailed statement from the Justice Department.

“Overcharging for lifesaving medical devices wastes taxpayer dollars,” Assistant U.S. Attorney General Tony West said in the statement.

Fry worked for Guidant in Tennessee and Kentucky from 1981 to 1997 according to a revised complaint filed with the court in 2006. His lawsuit was filed under the federal False Claims Act.

“Boston Scientific has denied the allegations but is pleased this settlement resolves all claims in the case,” Denise Kaigler, a senior vice president and spokeswoman for the Natick, Massachusetts-based company, said in an e-mailed statement.

The case is U.S. ex rel. Fry v. Guidant Corp., 03-cv-842, U.S. District Court, Middle District of Tennessee (Nashville).

--Editors: Mary Romano, Andrew Dunn

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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