Exactech Inc., a medical device company based in Gainesville, Florida, has agreed to pay $8 million to settle allegations that it violated the federal False Claims Act. The allegations involve claims that Exactech knowingly submitted or caused the submission of false claims for payment to Medicare, Medicaid, and the United States Department of Veterans Affairs related to defective knee replacement devices.
The settlement addresses two separate components of Exactech’s total knee replacement systems. First, authorities allege that as early as January 2008, Exactech was aware its finned tibial tray failed prematurely at a higher than acceptable rate but continued marketing and selling the component for surgeries performed on Medicare, Medicaid, and VA beneficiaries through December 2018. Second, from January 2019 onward, Exactech allegedly knew that the polyethylene component in certain Logic and Truliant knee replacement systems also failed prematurely but continued selling these products until February 2022.
“Today’s resolution reaffirms our commitment to protect the health and safety of patients,” said Prim F. Escalona, U.S. Attorney for the Northern District of Alabama. “Medical device manufacturers must ensure their medical devices, which may be implanted in patients’ bodies, meet the necessary standards of safety and effectiveness at all times.”
Hayes added: “Patients who need a medical device to enjoy their lives rely on device manufacturers to put patient safety first. When a manufacturer learns that its device is defective, it must promptly and transparently address the problem. We will hold companies accountable who knowingly sell defective devices.”
Under terms of the agreement, Exactech will pay $8 million in total; $7.64 million represents the federal share while states will separately resolve matters concerning a $360,000 state share. The settlement amount reflects Exactech’s financial condition.
The civil settlement resolves claims brought under whistleblower provisions by Brooks Wallace, Robert Farley and Dr. Manuel Fuentes in United States ex rel. Wallace v. Exactech (N.D. Ala.), as well as by Dr. Pasquale Petrera in United States ex rel. Petrera v. Exactech (D. Md.). Under these provisions private parties can file actions on behalf of the government and receive part of any recovery; here Alabama whistleblowers will receive about $1.33 million while Maryland’s whistleblower receives about $565 thousand.
This resolution resulted from coordination between several agencies including the Justice Department’s Civil Division (Commercial Litigation Branch), U.S. Attorney’s Offices for both Northern District of Alabama and District of Maryland, with assistance from Health and Human Services Office of Inspector General.
Officials note this case highlights ongoing efforts against health care fraud using tools such as the False Claims Act; potential fraud can be reported via HHS at 800-HHS-TIPS (800-447-8477).
Assistant U.S. Attorneys Don Long (Northern District of Alabama) and Matthew Haven (District of Maryland), along with Senior Trial Counsel Michael Hoffman (Civil Division), handled this matter.
Authorities emphasize that these are allegations only; there has been no determination of liability.
