Medical Device Company to pay $8 million for allegedly selling defective knee implant devices

BIRMINGHAM, Ala. (WHNT) — A medical device company based in Gainesville, Florida, has agreed to pay $8 million to resolve allegations that the company violated the federal False Claims Act.

The allegations claim Exactech Inc. knowingly submitted or caused the submission of false claims for payment to Medicare, Medicaid and the United States Department of Veterans Affairs in connection with defective knee replacement devices.

The U.S. Department of Justice said the settlement relates to two separate components of Exactech’s total knee replacement systems. 

First, the settlement resolves allegations that as early as January 2008, Exactech was aware that its finned tibial tray (a metal component of its knee replacement system that fits into a patient’s tibia) failed prematurely at a higher than acceptable rate and therefore, was not reasonable and necessary for use during total-knee replacement surgeries performed on Medicare, Medicaid, and VA beneficiaries. Exactech nonetheless continued to market and sell that component for surgeries between January 1, 2008, and December 31, 2018.

Second, the settlement also resolves allegations that, as early as January 2019, Exactech was aware that the polyethylene component in certain Logic and Truliant knee replacement systems failed prematurely at a higher than acceptable rate and, therefore, was not reasonable and necessary for use during total-knee replacement surgeries performed on government beneficiaries.

The claims state that, despite knowing of this defect, the company continued to sell the Logic and Truliant knee systems with these defective polyethylene components for use during total-knee replacement surgeries between January 1, 2019, and February 7, 2022. 

Under the terms of the settlement, Exactech will pay a total of $8 million, of which $7,640,000 is the federal share. The states will enter into separate agreements with Exactech relating to the $360,000 state share. The settlement is based on Exactech’s financial condition.

“Today’s resolution reaffirms our commitment to protect the health and safety of patients,” said Prim F. Escalona, U.S. Attorney for the Northern District of Alabama. “Medical device manufacturers must ensure their medical devices, which may be implanted in patients’ bodies, meet the necessary standards of safety and effectiveness at all times.”