Innovasis, management settles false claims case for $12 million

Innovation; Brent Felix, president and founder of the company; and Garth Felix, CFO, violated the False Claims Act by paying bribes to spine surgeons to induce them to use Innovasis spine devices, the Department of Justice (DOJ) alleges in a settlement released Wednesday.

Details: From January 2014 to December 2022, Innovasis made payments such as consulting fees, intellectual property acquisitions, royalties, performance shares and other examples to 17 orthopedic and neurosurgeons to encourage their use of implants Innovasis spine and other devices, the Justice Department said. The alleged payments were suspicious because they were higher than expected. Some payments were made, but the services were never provided and the intellectual property was never made available.

The Justice Department found that the Felix brothers controlled or directed the improper compensation arrangements.

The Justice Department says the doctors were also provided with travel to a luxury ski resort and dinners and holiday parties for colleagues and family.

Compatibility Notes: Former Innovasis regional sales director Robert Richardson originally filed a complaint against the company for alleged misconduct. Under What’s up under the False Claims Act, Richardson will receive approximately $2.2 million as his share of the settlement.

Of the total settlement amount, $6 million is compensatory damages.

“Payments from medical device manufacturers were intended to influence a physician’s decision about which medical devices or supplies to choose were illegal,” Brian Boynton, head of the Justice Department’s Civil Division, said in a 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, not on improper payment by manufacturers.”

Innovasis did not immediately respond to a request for comment.