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Tissue graft company agrees to pay $6.5 million to settle a False Claims Act lawsuit focused on sales to the Department of Veterans Affairs

Mon 6th Apr 2020, Blog

A Georgia company that manufactures and sells human tissue grafts agreed to pay $6.5 million to settle allegations that it violated the False Claims Act. The case, unsealed last October, settled relatively quickly before the defendant, MiMedx Group Inc. (“MiMedx”), filed a responsive pleading.

The qui tam complaint filed by former MiMedx sales representatives alleges that MiMedx falsely represented its commercial sales prices to the Department of Veterans Affairs (“VA”).  By claiming that it sold its tissue graft products at falsely inflated prices, MiMedx was able to overcharge the VA because the VA considered the false commercial pricing when negotiating its own pricing with MiMedx.

According to the Department of Justice, the whistleblowers who brought the allegations to the government’s attention will be paid $1.625 million as part of the settlement.

The government’s press release may be found here: https://www.justice.gov/opa/pr/mimedx-group-inc-agrees-pay-65-million-resolve-false-claims-act-allegations-false-commercial

This settlement and others highlight the government’s reliance on company insiders to provide information concerning potential fraudulent activities by government contractors and others who indirectly provide products or services to the government. 

Bienert Katzman, PC has specific expertise and experience in handling False Claims Act matters.

Ms. Hawbecker is a partner at Bienert Katzman. She represents qui tam plaintiffs in both Federal and state False Claims Act cases.