September 9, 2014 by Arezu Sarvestani
The U.S. Justice Dept. says that it has a record of Reliance Medical’s owners telling a potential investor that they devised the company to “get around” federal anti-kickback laws.
Federal investigators are pushing forward with claims against Reliance Medical Systems, saying that they have evidence that the company’s owners devised a kickback scheme to induce doctors to use Reliance spinal implants, even sometimes when patients didn’t need the procedure.
The Justice Dept. accused Reliance owners Brett Berry, John Hoffman and Adam Pike of using the company to create a physician-owned distributorship to funnel illegal payments to several physicians to reward them for using Reliance spinal implants.
“Allegedly, Reliance’s owners were recorded telling a potential Kronos investor that Reliance was formed as part of a plan to ‘get around’ the federal Anti-Kickback Statute, which prohibits such improper payments, and that Reliance pays its physician-investors enough in the first month or 2 to ‘put their kids through college,'” the DoJ reported.
Reliance Medical did not immediately respond to requests for comment.
One physician, Dr. Aria Sabit, allegedly began using Reliance implants only after acquiring an ownership in Reliance distributorship Apex Medical, from which he received nearly $440,000 between May 2010 and July 2012, according to aDoJ statement. The agency added that the payments induced Sabit to use the implants excessively and unnecessarily in patients who didn’t need them.
