U.S. Government Intervenes in qui tam action against Guidant Corporation

Former sales agent brings suit, accuses Guidant Corp. of Defrauding Federal Government, hospitals in overstating cost of replacement implant medical devices

NASHVILLE, TN—Robert A. Fry, a former sales agent of Indiana-based Guidant Corporation, a manufacturer and distributor of implanted medical devices (IMDs), has brought a Qui Tam Action, on behalf of the United States government under the False Claims Act against the corporate giant. Mr. Fry claims that Guidant engaged in a systematic scheme since 1981, which caused the U.S. Department of Health and Human Services, the Health Care Finance Administration and the Centers for Medicare and Medicaid Services to pay inflated reimbursements to various hospitals for replacement IMDs.

IMDs are sold to government hospitals, such as VA hospitals, not-for-profit hospitals and investor-owned hospitals. Cardiologists, vascular surgeons and electro-physiologists implant these medical devices at hospital facilities. The cost of IMDs and replacement IMDs is generally paid for by the purchasing hospital and is reimbursed by the United States government agencies pursuant to the Medicare and Medicaid programs. The U.S. market for IMDs is in excess of $10.3 billion.

Mr. Fry was employed by Guidant from April, 1981, until March, 1997.  He alleges that the corporation, which also operates in Texas, systematically and fraudulently concealed from health care providers the existence of rights to certain refund credits on its products and that such concealment caused health care providers to seek and obtain reimbursement from the federal and state governments for the full cost of the defendant’s products without reduction by the credits that were due.

“Guidant Corporation willfully and intentionally concealed replacement credits and upgrade credits from hospitals and state and federal agencies and overstated costs over a period of many, many years,” said Ted Leopold, managing partner of the consumer justice law firm of Ricci~Leopold in Palm Beach Gardens, Florida, who represents Fry in the Qui Tam Action.  “Furthermore, we have learned that hospital purchasing departments often were not given an option to substitute other similar, less costly IMDs for the Guidant products,” Mr. Leopold stated. “It is our duty to hold these corporations accountable for their actions, which affect all of us,” he concluded.

Ted Leopold is managing parnter in the law firm of Ricci~Leopold, P.A. As consumer justice advocates, the attorneys at Ricci~Leopold pursue justice for those who are harmed by the misconduct of insurance companies and corporations.  The firm, founded in 1982, has six attorneys and is headquartered in Palm Beach Gardens, Florida, with offices located at 2925 PGA Blvd.  Mr. Leopold and Mr. Ricci can be contacted at (561)684-6500.  Additional information about Ricci~Leopold , P.A. may be obtained from the firm’s website at  www.riccilaw.com

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