A Massachusetts federal judge reconsidered reviving Medtronic's bid to defeat claims it violated the False Claims Act in light of new First Circuit precedent on a causation standard, but ruled that a whistleblower's evidence warranted keeping the claims alive for now.
U.S. District Judge Indira Talwani, on Friday, took up Medtronic's request to reconsider her March 2024 decision denying the medical device maker's motion for summary judgment, saying that the First Circuit's adoption of a "but-for causation" standard for kickback cases in U.S. v. Regeneron Pharmaceuticals Inc. was an "intervening change in controlling law."
But that change in law wasn't enough for her to now grant Medtronic's motion, she ruled, saying whistleblower Adam Witkin "proffered evidence sufficient to survive summary judgment under such a standard."
"The extensive activities of Medtronic personnel, which the court determined to constitute remuneration under the [Anti-Kickback Statute]..., provide more concrete evidence of causation than the 'temporal proximity' questioned by the district court in Regeneron or the cases it cited," Judge Talwani wrote in a memorandum and order.
Judge Talwani had denied Medtronic's motion for summary judgment on FCA claims in March 2024, finding that Witkin, who oversaw sales of the company's medical devices for diabetes treatment and management, presented sufficient evidence that Medtronic provided remunerative activities to healthcare providers related to the company's iPro continuous glucose monitoring device.
Talwani had ruled that the evidence sufficiently showed a genuine dispute of material fact as to whether Medtronic sales representatives' and managers' conduct in running iPro clinics "crossed the line from mere product support to effectively running the iPro clinics on behalf of the physicians."
She said that evidence also suggested that Medtronic provided physicians with resources "even beyond running gratuitous iPro clinics."
As to scienter, Judge Talwani held that there was sufficient evidence for a reasonable jury to find that Medtronic "knowingly and willfully violated the AKS by having its sales representatives and Medtronic managers continuously involved in iPro clinics, and by consistently staffing Medtronic personnel in physician's offices as a means of 'adding value' to those physicians' practices, in order to induce physicians to prescribe Medtronic's insulin pumps in lieu of competitors' products."
In February, the First Circuit, in an eagerly awaited decision, adopted an industry-friendly interpretation of disputed words in the AKS, which is often used as a basis for FCA suits.
At issue was a 2010 amendment, included in the Affordable Care Act, that said billing claims "resulting from" kickbacks are false under the FCA. The First Circuit held that the statutory phrase "resulting from" requires but-for causation.
On Friday, Judge Talwani, who had refused to pause the FCA claims so that Medtronic could appeal, said that while the First Circuit "did not elaborate on what but-for causation entails, the district court opinion it affirmed is instructive."
According to Judge Talwani's memo, evidence that the district court in the Regeneron case found sufficient to survive summary judgment under the but-for causation standard was an expert report that filtered disbursement data from a third-party charity in conjunction with Medicare claims data and that performed a "matching" analysis identifying Medicare claims for which the charity paid for some or all of a beneficiary's copay.
The district court had also considered evidence that the price of a therapy that wasn't covered by the charity was dramatically lower than that of a Regeneron drug, Judge Talwani noted in her memo.
As to the case against Medtronic, Judge Talwani said that the court "similarly considered evidence matching the presence of Medtronic personnel with an uptick in specific claims submitted by healthcare providers."
That evidence included Centers for Medicare & Medicaid Services claims data from physicians who had Medtronic sales representatives and managers "extensively and repeatedly participate in iPro clinics." Witkin had also provided "temporal links between certain physicians' claims data to certain patients known to have attended iPro clinics," Judge Talwani said.
Among Judge Talwani's previous findings was that there was evidence backing Witkin's claims that designated Medtronic field personnel were instructed to work with a provider office to identify and schedule four to six patients for the clinic, come into the office with Medtronic equipment, place and train patients on the iPro and take other steps with the ultimate goal of selling Medtronic products.
Judge Talwani said Friday that while she previously rejected and thus did not consider the application of the but-for causation standard, Witkin's evidence "is sufficient to survive summary judgment as to the causation issue on his FCA claims even under the standard now set forth in Regeneron."
Counsel for the parties did not immediately respond to requests for comment Monday.
Witkin is represented by Jennifer M. Verkamp, Chandra Napora and Jonathan M. Lischak of Morgan Verkamp LLC and David Rich, Christopher Weld and Christian G. Kiely of Todd & Weld LLP.
Medtronic is represented by James P. Dowden, Kathryn Caldwell and Samantha Barrett Badlam of Ropes & Gray LLP and Adam Morris of Nelson Mullins Riley & Scarborough LLP.
The case is United States ex rel. Witkin et al. v. Medtronic Inc. et al., case number 1:11-cv-10790, in the U.S. District Court for the District of Massachusetts.
Nov 17
Deal Summary
