May 22, 2008 — Medtronic Spine LLC.

Medtronic Spine LLC, the corporate successor to Kyphon Inc., has agreed to pay $75 Million to settle qui tam allegations filed against it by two former employees.

The allegations of the case were that Kyphon engaged in a seven (7) year marketing scheme that resulted in hospitals billing Medicare for certain medical procedures on an “inpatient” basis, rather than a less costly outpatient basis, which resulted in Medicare paying more for such procedures.

Two former employees disclosed the scheme by filing a qui tam action under the federal False Claims Act. As a reward, they will receive $14.9 Million.

“The settlement further demonstrates the private-public partnership fostered through the False Claims Act involving whistleblowers working with the United States continues to result in the identification of waste, fraud and abuse and the significant return to the taxpayers of ill-gotten gains,” said Terrance P. Flynn, U.S. Attorney for the Western District of New York.

See U.S. Dept of Justice Press Release 5/22/08

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