Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

January 10, 2014

$40.1 million multi-state CareFusion settlement a win in fighting off-label marketing, Medicaid fraud

HARRISBURG - Attorney General Kathleen G. Kane today announced that Pennsylvania has joined with other states and the federal government in a global settlement with CareFusion, a manufacturer of medical and surgical supplies and medical devices, to resolve civil allegations of unlawful marketing practices and the payment of kickbacks aimed at promoting sales of its surgical preparation solution, Chloraprep.

Under the terms of the settlement, CareFusion will pay $40.1 million to the states and the federal government for allegedly promoting and marketing Chloraprep for uses that were not approved by the Food and Drug Administration (FDA) some of which were not medically accepted indications. 

CareFusion's alleged unlawful conduct occurred for nearly two years beginning in 2009, and caused false and/or fraudulent claims to be submitted to or caused purchases by government-funded health care programs, including the Pennsylvania Medicaid Programs.

In addition, CareFusion's predecessor corporation entered into agreements, as to which CareFusion assumed legal and financial responsibility, for the payments of monies to an entity known as Health Care Concepts, Inc. (HCC).

The payments were allegedly made in order to conceal kickbacks to the physician-owner of HCC, for the purpose of promoting and inducing providers to use Chloraprep, in violation of various federal and state anti-kickback statutes.

A team from the National Association of Medicaid Fraud Control Units worked closely with the federal government on the investigation and conducted the settlement negotiations with CareFusion on behalf of the states. 

(A person charged with a crime is presumed innocent until proven guilty.)

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