If you don’t think that medical or healthcare companies don’t do marketing stuff related to their products, then you’re actually wrong. Just recently, you must have seen or heard anything about the Innovasis lawsuit, and this is exactly about the sketchy practices that this company was doing. Like, the allegations are that this company was giving out perks and luxury benefits to some healthcare professionals out there to specifically use their spinal implants in the surgeries that they perform. And yup, that’s an illegal act.
What Is Innovasis?
Wouldn’t you agree that before we get to the case itself, we should get to know a little bit about Innovasis, right? So, first of all, it has been in the spinal medical device sector for several years. And? Well, for a very long time, the company was under the leadership of its founder and president, Brent Felix, while his brother, Garth Felix, was the Chief Financial Officer.
As in this case we’re seeing, the commissioner alleged that the executive duo made both of them actively responsible for the choices that led to the infractions. Instead of merely supervising the operations, it was claimed that they dominated the key interactions with the surgeons that were beyond what the law actually allows and what they can do within the legal boundaries.
What Were the Allegations?
Alrighty, let’s now get to the main part, which you’re all here for, so, in actuality, the main accusations relate to events that took place between 2014 and 2022. What are the allegations though? It is being said in this case that Innovasis provided doctors with consulting fees that exceeded fair market value, and that is just not it, see, it has been seen that sometimes the doctors even got paid for the services they did not perform. That’s a little sketchy.
Another serious one is that the company is also said to have bought or licensed intellectual property from doctors without proper valuation and later not have used that property at all. DOJ even went on to talk about or mention the things like company shares, lavish dinners, holiday parties, and luxury ski trips for the surgeons and their families. Those are pretty much the reason why some people got skeptical of it all.
And it could very well be that this kind of thing doesn’t sound too serious to some of you, but just so you know, this type of behavior is a breach of the Anti-Kickback Statute that forbids giving anything of value to medical professionals to influence their decisions concerning federal healthcare programs.
How Did the Case Start?
Whistleblower was the starting point of the case. Robert Richardson, once the regional sales director at Innovasis, brought a lawsuit under the False Claims Act after failing to obtain satisfactory responses to his concerns raised internally. Yes, he did do that but didn’t get any fair response at the time, so he went ahead with all this.
This is the lawsuit type that lets a private person report debts to the government. This case, also called United States ex rel. Richardson v. Innovasis Inc. resulted in the federal probe. Richardson got a part of the bargain, which was nearly $2.2 million.
The $12 Million Settlement
After this case went on for quite a while, we finally saw the settlement was finalized in May 2024. Innovasis covered the majority of the payment, whereas Brent Felix and Garth Felix each gave a personal contribution, which is also an important part you should not miss out on. BUT, the major part here is that just like so many big companies after getting involved in such legal issues, sure enough, Innovasis also didn’t accept their wrongdoing. They just disregarded all these claims and allegations.
