By: Christopher A. Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Law Defense and Compliance Firm

Innovasis Inc., a spinal device manufacturer, and its senior executives, Brent Felix and Garth Felix, agreed to pay $12 million to settle allegations of paying kickbacks to physicians to promote their spinal devices. The settlement resolves claims that from January 1, 2014, to December 31, 2022, Innovasis provided improper remuneration, including consulting fees, intellectual property payments, and lavish perks, to seventeen orthopedic surgeons and neurosurgeons, violating the Anti-Kickback Statute.

The Federal Anti-Kickback Statute prohibits offering or paying anything of value to induce referrals of items or services covered by Medicare and other federally funded programs. The statute ensures that medical providers’ judgments are not compromised by improper financial incentives. The civil settlement includes claims brought under the qui tam provisions of the False Claims Act by Robert Richardson, a former Regional Sales Director for Innovasis, who will receive approximately $2.2 million of the recovery. The case highlights the importance of compliance with federal regulations to maintain the integrity of healthcare services.

Details of the Settlement
Innovasis, a spinal device manufacturer, and its executives, Brent Felix (President and Chairman) and Garth Felix (CFO), were accused of providing unlawful payments to seventeen orthopedic surgeons and neurosurgeons. These payments, which were meant to induce the use of Innovasis’s spinal implants in Medicare procedures, included consulting fees, licensing fees, and lavish trips.

The improper payments allegedly took various forms:

• Consulting Fees: Paid at rates far above fair market value.
• Licensing Fees: Paid for intellectual property with no prior valuation and no subsequent use.
• Lavish Trips and Dinners: Provided for physicians and their families at luxury resorts.

Legal Implications
The Anti-Kickback Statute prohibits any form of payment to induce referrals for services covered by federal health programs, ensuring medical decisions are based on patient care, not financial incentives. The settlement reflects the commitment to maintain the integrity of healthcare systems and prevent financial influences on medical decisions.

Whistleblower Involvement
The case was brought to light by Robert Richardson, a former Regional Sales Director for Innovasis, under the qui tam provisions of the False Claims Act. As a result of his actions, Richardson will receive approximately $2.2 million from the settlement.

At Parrella Health Law, we specialize in helping healthcare organizations navigate compliance with the Anti-Kickback Statute and other federal regulations. For assistance, contact us at 857.328.0382 or email me directly at cparrella@parrellahealthlaw.com.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)