WASHINGTON – The Justice Department announced today that it has filed a complaint against Midwest Neurosurgeons L.L.C. and its owner, Dr. Sanjay Fonn, M.D., and DS Medical L.L.C. and its owner, Deborah Seeger, for allegedly violating the Medicare Anti-Kickback Statute and the False Claims Act by conspiring to solicit and receive commissions from medical device manufacturers related to the purchase of spinal implants and supplies used during spinal fusion surgeries performed by Dr. Fonn.
“The Department of Justice remains committed to protecting federal healthcare programs from unscrupulous providers who seek to take advantage of those programs,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We are particularly concerned about schemes such as this one that not only waste taxpayer money but also pose a potential risk to patient safety.”
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federal healthcare programs. It is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based upon the best interests of the patient.
The government’s complaint alleges that Dr. Fonn, 46, and his fiancée, Ms. Seeger, 47, both of Cape Girardeau, Missouri, incorporated D.S. Medical L.L.C. to serve as the distributor of medical devices and supplies to Dr. Fonn and his neurosurgery practice, Midwest Neurosurgeons L.L.C., in Missouri. Through D.S. Medical, Ms. Seeger demanded and was paid exorbitant commissions by medical device manufacturers for medical devices and supplies purchased by the hospital where Dr. Fonn performed spinal fusion surgeries. The hospital’s purchases were based on Dr. Fonn’s decision to use those devices and supplies during operations he performed. According to the complaint, once DS Medical started operating, Dr. Fonn altered the way he practiced medicine, generally using more spinal implants in each of his surgeries while performing more surgeries than he typically performed before or after DS Medical was operating. The commissions paid to D.S. Medical and Ms. Seeger by the manufacturers were allegedly used to purchase a house where Dr. Fonn and Seeger cohabited, a boat, an airplane and various home improvements, which they shared.
The allegations in the U.S. complaint were originally brought in a lawsuit filed under the qui tam provisions of the False Claims Act by several physicians, a spinal implant sales person, and a former employee of Midwest Neurosurgeons. Under the False Claims Act, a person that submits false or fraudulent claims to the government is liable for three times the government’s damages, plus civil penalties for each false claim. The act permits private citizens to sue on behalf of the government and share in any recovery. The United States is entitled to intervene in such a lawsuit, as it has done in this case.
The Commercial Litigation Branch of the Justice Department’s Civil Division, together with the U.S. Attorney’s Office for the Eastern District of Missouri, filed this case on behalf of the United States with the assistance of the Department of Health and Human Services Office of Inspector General and the FBI.
The qui tam case is captioned United States ex rel. Paul Cairns, Terry Cleaver, M.D., Kyle Colle, M.D., Scott Gibbs, M.D., Paul Tolentino, M.D., Kevin Vaught, M.D., and Daniel Henson v. D.S. Medical, L.L.C., Midwest Neurosurgeons, L.L.C., Sonjay Fonn, M.D., and Deborah Seeger, No. 1:12 CV 00004 SNLJ (E.D. Mo.). The complaint filed by the government contains allegations only; there has been no determination of liability.