Whistleblower Reward - Medical Device Cold Calling

September 13th, 2016

The False Claims Act (the FCA) provides for rewards to private citizens for filing a lawsuit as a whistleblower with information that results in the federal government recovering ill-gotten gains from unscrupulous companies at taxpayer expense. If the government decides to proceed against a company pursuant to a FCA lawsuit, the whistleblower can be rewarded between 15 and 25 percent of the government’s recovery.


Medicare is a federally-funded medical insurance program for elderly and disabled Americans. Unfortunately, some unscrupulous medical device providers don’t play by the rules that are designed to guard the system against waste, fraud and abuse at taxpayer expense.


One of those rules is the Medicare Anti-Solicitation Statute (the MAS). The MAS prohibits medical device companies, or any person or company working for them, from “cold calling” Medicare beneficiaries to promote their products. Unless the Medicare beneficiary who receives such a cold call has already recently used the medical device company’s products, such cold calling telephone marketing is against the law. The MAS requires the medical device company engaging in such cold calling to pay back any money received from Medicare from such illegal marketing. The applicable paragraphs of the statute are as follows:

(17) Prohibition against unsolicited telephone contacts by suppliers

(A) In general
A supplier of a covered item under this subsection may not contact an individual enrolled under this part by telephone regarding the furnishing of a covered item to the individual unless 1 of the following applies:
(i)The individual has given written permission to the supplier to make contact by telephone regarding the furnishing of a covered item.
(ii)The supplier has furnished a covered item to the individual and the supplier is contacting the individual only regarding the furnishing of such covered item.
(iii)If the contact is regarding the furnishing of a covered item other than a covered item already furnished to the individual, the supplier has furnished at least 1 covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.
(B) Prohibiting payment for items furnished subsequent to unsolicited contacts
If a supplier knowingly contacts an individual in violation of subparagraph (A), no payment may be made under this part for any item subsequently furnished to the individual by the supplier.
(C) Exclusion from program for suppliers engaging in pattern of unsolicited contacts
If a supplier knowingly contacts individuals in violation of subparagraph (A) to such an extent that the supplier’s conduct establishes a pattern of contacts in violation of such subparagraph, the Secretary shall exclude the supplier from participation in the programs under this chapter, in accordance with the procedures set forth in subsections (c), (f), and (g) ofsection 1320a–7 of this title.


The government recently recovered $12 million dollars from two related companies who were cold calling Medicare beneficiaries to market diabetic medical devices.


If you or anyone you know is aware of any medical device company making cold calls to market their products to Medicare beneficiaries, that information could be used as a basis for a FCA lawsuit which could result in an award of between 15 and 25 percent of the government’s recovery from the company or companies violating the MAS.


The rules regarding FCA lawsuits by private citizens are complex. In fact, the FCA requires an FCA whistleblower lawsuit to be filed by a licensed attorney for the whistleblower to obtain a reward from the government’s recovery. Your Kansas City False Claims Act lawyers at Brady & Associates have extensive experience representing FCA whistleblowers.

Categories: Kansas City Whistleblower Lawyer Blog, Medicare Fraud, Uncategorized