U.S. Attorney Sues Malden Spinal Device Company

MALDEN, MA — The U.S. Attorney's office has filed a civil health care fraud complaint against Malden-based spinal device company SpineFrontier, Inc. The company's founder and CEO, Kingsley Chin, and CFO Aditya Humad are accused of paying and conspiring to pay kickbacks to surgeons in the form of sham consulting fees through consulting firm Impartial Medical Experts, LLC.

Authorities say Impartial Medical Experts (IME) is a sham third-party firm. Chin's wife, Vanessa Dudley, is the business administrator for the firm and has been named in the lawsuit, along with IME and other entities Chin owns and controls, according to the USAO.

SpineFrontier and IME are accused of paying more than $8 million in kickbacks to surgeons, which generated more than $100 million in revenue, with the vast majority of SpineFrontier's total domestic sales revenues coming from kickback-tainted surgeries, according to the USAO.

The lawsuit alleges that payments were made to surgeons to induce them to use SpineFrontier's devices in spinal surgeries. The defendants are accused of violating the Anti-Kickback Statute, costing federal health care programs millions of dollars in false claims, according to the USAO.

The USAO has settled civil health care fraud claims against five doctors who admitted to receiving kickbacks from SpineFrontier through IME for consulting work they did not do, federal authorities say.

Each doctor admitted that SpineFrontier, Chin or Humad specifically instructed him to bill "consulting" hours to SpineFrontier for each and every surgery in which he used a SpineFrontier device, regardless of whether he spent any time consulting, according to the USAO:

• Dr. F. Paul DeGenova, an orthopedic spine surgeon in Ohio, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $486,985;
• Dr. Michael Murray, an orthopedic spine surgeon in New York employed by the Department of Veteran Affairs, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $330,668;
• Dr. Joseph Shehadi, a neurosurgeon in Ohio, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $323,419;
• Dr. Agha Khan, a neurosurgeon in Maryland, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $310,843; and
• Dr. John Atwater, an orthopedic surgeon who has worked in in Florida and Illinois, admitted to accepting payments from SpineFrontier via IME for consulting hours he did not work, and agreed to settle the government’s claims for $105,149.

The surgeons cooperated with the government's investigation into SpineFrontier and IME, according to the USAO.

According to the government’s complaint, Dudley is the sole employee of IME, which operates only with a Florida post office box. Federal authorities say SpineFrontier and IME set no limit on the number of times a surgeon could evaluate a SpineFrontier device, leading to numerous instances in which SpineFrontier paid the same physician for repeatedly submitting consulting hours on the same SpineFrontier device.

According to the complaint, SpineFrontier made no effort to catalogue, review or assess feedback that surgeon-consultants provided. Often, the defendants paid surgeons for consulting time, even when surgeons had provided no product feedback.

In connection with the filing of its complaint, the government intervened in two private whistleblower lawsuits that had been filed under seal pursuant to the False Claims Act.