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Attorney General Josh Stein Reaches $18 Million Settlement with Merit Medical Systems

For Immediate Release:
Monday, October 19, 2020

Contact:
Laura Brewer (919) 716-6484

(RALEIGH) Attorney General Josh Stein reached an $18 million multistate settlement with Merit Medical Systems Inc. to resolve allegations that Merit offered unlawful kickbacks to health care providers to persuade them to purchase Merit medical devices and caused false claims to be submitted to government health care programs. North Carolina will receive $465,650.70 in restitution and other recoveries.

“Health care providers should make decisions about patients’ care based on the best science and treatment available, not because a company is offering kickbacks,” said Attorney General Josh Stein. “These unlawful practices cheat taxpayers and patients, and I will hold companies accountable when they break the law.”

Merit is a Utah-based medical device manufacturer that markets and sells embolotherapeutic devices used to treat arteriovenous malformations, symptomatic uterine fibroids, and hypervascular tumors. The settlement resolves allegations that between Sept. 1, 2010, and March 31, 2017, Merit offered and paid physicians, medical practices, and hospitals millions in free advertising assistance, practice development, practice support, and purportedly unrestricted “educational” grants to get the health care providers to purchase and use Merit products in medical procedures performed on Medicaid beneficiaries. Merit used these tactics to reward high-volume customers with patient referrals and financial advertising support, but removed customers if they did not convert to or increase their use of Merit devices.

A National Association of Medicaid Fraud Control Units (“NAMFCU”) Team participated in the settlement negotiations with Merit on behalf of the states.

About the Medicaid Investigations Division (MID)

The Attorney General’s MID investigates fraud and abuse by health care companies and providers, as well as patient abuse and neglect in facilities that are funded by Medicaid. Medicaid is a joint federal-state program that helps provide medical care for people with limited income. To date, the MID has recovered more than $900 million in restitution and penalties for North Carolina.

The Medicaid Investigations Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,160,252 for Federal fiscal year (FY) 2020. The remaining 25 percent, totaling $2,053,414 for FY 2020, is funded by the State of North Carolina.

To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

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