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Biotronik Inc. allegedly compensated physicians for using its products and providing perks for appearances at conferences, according to the United States Department of Justice.

This story was updated from its original version

Lake Oswego-based Biotronik Inc. will pay a nearly $13 million settlement for allegedly providing kickbacks to physicians to prompt them to use their products and submitting false claims to Medicare and Medicaid, according to a July 22 release from the United States Department of Justice.

Biotronik responded to news of the settlement in a press release.

"The Company is pleased to put this investigation behind us so we can continue in our mission to deliver innovative solutions that save and improve patient lives every day," said BIOTRONIK Inc.'s President Ryan Walters. "Our guiding principle, 'Excellence for Life,' is reflected in everything we do, including continuous enhancements to our culture of compliance. Acting responsibly with our customer and physician partners is paramount."

Biotronik, which develops cardiovascular and endovascular medical devices and is located on Jean Road in town, allegedly incentivized physicians to use the company's implantable cardiac devices, such as pacemakers and defibrillators, which is illegal according to a federal law that bars paying anything of value to induce referrals of items or services covered by Medicare or other federally-funded programs. Biotronik, however, denies these allegations and notes that a determination of liability has not taken place.

"Paying kickbacks to doctors to influence their selection of medical devices undermines the integrity of federal health care programs," Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division, said in the press release. "When medical devices are used in surgical procedures, patients deserve to know that their device was selected based on quality of care considerations and not on improper payments from manufacturers."

According to the release, Biotronik was alleged to have paid physicians for training sessions, some of which were purportedly excessive or of little value to the trainees, while others allegedly never occurred.

"Biotronik allegedly made these payments despite concerns raised by its own compliance department, which warned that salespeople had too much influence in selecting physicians to conduct new employee training and that the training payments were being overutilized," the release read.

The company also allegedly paid for physicians' holiday parties, winery tours, expensive dinners and airfare for making appearances at conferences, the release stated. The purported infractions came to light due to whistleblowers and former sales representatives for the company Jeffrey Bell and Andrew Schmid. Bell and Schmid will receive $2.1 million based on the provision that private parties can file an action on behalf of the United States government and receive a payout. The states of Arizona, California, Illinois, Missouri and Nevada will receive over $933,000 in the settlement because Medicaid is funded by both the state and federal government.

Correction: An original version of this story did not make clear that the company denies wrongdoing and that the infractions have not been proven to be factual.


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