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South Dakota neurosurgeon Wilson Asfora, MD, and his two medical device distribution companies, to settle federal allegations around kickbacks and unnecessary procedures, the U.S. Department of Justice said this week.

The settlement resolves False Claims Act allegations related to illegal payments to Asfora for the use of certain medical devices, in violation of the Anti-Kickback Statute, as well as claims for medically unnecessary surgeries, the DOJ said.

Asfora's companies, Medical Designs and Sicage, have agreed to pay an additional $100,000 to settle allegations they failed to report to CMS Asfora's ownership interests and payments made to him.

The U.S. filed a complaint against the defendants in 2019, following a suit brought by a pair of whistleblowers. It alleged that Medical Designs and Sicage paid Asfora profit distributions in exchange for his use of their devices in his spine surgeries, and that Medical Designs resold other manufacturers' spinal devices and split the profits with Asfora when he used those devices in surgeries, the DOJ said.

It also alleged that Asfora solicited and received kickbacks from Medtronic in exchange for using its SynchroMed II infusion pumps, the DOJ said. The pumps are implantable devices used to deliver medication to patients.

"At Asfora's request, Medtronic allegedly paid the kickbacks to Asfora through a restaurant he owned ... in the form of lavish meals and alcohol for Asfora and his friends, colleagues, and business partners," according to the DOJ.

Finally, Asfora allegedly submitted false claims to federal healthcare programs for medically unnecessary procedures using devices in which he had a financial interest, the DOJ said.

Asfora and his two companies will be excluded from participating in Medicare, Medicaid, and other federal healthcare programs for 6 years under the terms of the settlement agreement, the DOJ said.

"Kickback dollars can corrupt the high-quality medical care patients deserve and taxpayers fund," special agent Curt Muller of the HHS Office of the Inspector General, said in a statement.

The U.S. recovered more than $33 million related to this case, the DOJ said. That included a False Claims Act for more than $20 million in October 2019 as well as a False Claims Act and Open Payments for more than $9 million in October 2020.

DOJ noted that the two whistleblowers who brought the original suit will receive $880,000 of the settlement proceeds.

Lawyers for Asfora and his two companies did not immediately respond to a request for comment.

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