Boston Scientific Corp.'s Guidant unit will pay $9.25 million to settle a whistleblower's claim that the company overbilled the federal government and private hospitals for heart pacemakers and defibrillators.
The Justice Department said Monday that the accord ends a lawsuit filed against Guidant by a former sales agent, Robert A. Fry, in federal court in Nashville, Tenn. He'll get more than $2.3 million from the settlement.
Guidant allegedly reneged on credits owed to the Department of Veterans Affairs for replacement of units still under warranty and is accused of overcharging hospitals for the devices, causing them to over-bill Medicare, according to Assistant U.S. Attorney General Tony West.
"Overcharging for lifesaving medical devices wastes taxpayer dollars," West said.
Guidant is a unit of Natick, Mass.-based Boston Scientific. Erik Kopp, a spokesman for the company, said he couldn't immediately comment on the Justice Department announcement.
Fry worked for Guidant in Tennessee and Kentucky, according to a revised complaint filed with the court in 2006, the year that Boston Scientific acquired Guidant.