CareFusion Agrees to Pay More Than $450,000 to MassHealth Over Unlawful Marketing of Surgical Skin Antiseptic
Allegations Include Payment of Kickbacks; Company to Pay $40.1 Million in Multistate Settlement with the U.S. Department of Justice
BOSTON – A manufacturer of medical supplies and devices has agreed to pay more than $450,000 to the state’s Medicaid program (MassHealth) to resolve allegations of unlawful marketing practices and the payment of kickbacks aimed at promoting sales of the surgical preparation solution, Chloraprep.
Under the terms of the civil settlement with 49 states, the District of Columbia and the United States Department of Justice, CareFusion, a corporation developed from Cardinal Health, will pay a total of $40.1 million.
“MassHealth is a critical resource for Massachusetts residents and we are pleased to recover taxpayer money for a program designed to provide care and treatment to our most vulnerable citizens,” AG Coakley said.
The settlement resolves a whistleblower lawsuit filed in the United States District Court for the District of Kansas, under the provisions of the federal False Claims Act and other similar state false claims statutes.
The lawsuit alleges that during the period between Sept. 1, 2009 and Aug. 31, 2011, CareFusion promoted Chloraprep for use with intravenous preparation and suture care, which went beyond the Food and Drug Administration (FDA) approved label uses. The solution was approved by the FDA for specific inpatient hospital procedures, including the preparation of a patient’s skin prior to surgery or injection, but the FDA explicitly rejected its use for intravenous preparation and suture care.
According to the complaint, CareFusion also allegedly made and disseminated unsubstantiated representations about the use of Chloraprep during that same time period.
During the course of several months in 2008, CareFusion’s predecessor corporation Cardinal Health entered into agreements, as to which CareFusion assumed legal and financial responsibility, for the payments of money to an entity known as Health Care Concepts, Inc. (HCC).
The payments were allegedly made to conceal kickbacks to the physician-owner of HCC, for the purpose of promoting providers to use Chloraprep. CareFusion’s alleged unlawful conduct caused false and fraudulent claims to be submitted and caused purchases by government funded health care programs, including MassHealth.
The case was handled for the Commonwealth by Assistant Attorney General Nancy Maroney of AG Coakley’s Medicaid Fraud Division. A team from the National Association of Medicaid Fraud Control Units worked closely with the federal government on the investigation and conducted the settlement negotiations with CareFusion on behalf of the states.
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