Issue link: https://beckershealthcare.uberflip.com/i/1199058
29 ORTHOPEDICS Tenet agrees to pay $66M settlement in orthopedic surgical facility kickback suit By Laura Dyrda T enet agreed to pay around $66 million to settle a lawsuit alleging the company violated False Claims, Anti-kickback Statute and Stark Law related to services performed at one of its hospitals, according to a recent SEC filing. Three key notes: 1. The Dallas-based company's United Surgical Partners International jointly owned Oklahoma Center for Orthopedic & Multispecialty Surgery, which billed government payers for services that were provided by physicians that alleg- edly had an improper financial relationship with the hospital. 2. The whistleblower lawsuit was filed in 2016 and unsealed in May 2018, and the Department of Justice declined to intervene with the issues that involved Tenet and USPI. The company disclosed in its quarterly filings on Nov. 5 that it entered into a tentative agreement with the DOJ to pay $66 million to resolve the suit. 3. e Justice Department and other government agencies still need to approve the agree- ment. However, Tenet has already established a reserve for the payment, which it believes could be final during the first quarter of 2020. n Orthopedic investments in Q3 + how ASCs can benefit from private equity attention By Angie Stewart T wo new private equity plat- forms were established in the orthopedic sector in the third quarter of 2019, according to Provi- dent Healthcare Partners' "Q3-2019 Physician Services Update." Two transactions took place in the orthopedic sector in July: Revel- stoke Capital Partners' acquisition of Cincinnati-based Beacon Or- thopaedics and Sports Medicine, and Kohlberg & Co.'s acquisition of Greenwich, Conn.-based Orthopae- dic Neurosurgery Specialists. With 27 physicians, Beacon Or- thopaedics and Sports Medicine operates eight locations throughout Indiana, Kentucky and Ohio. Ortho- paedic Neurosurgery Specialists employs 26 physicians at three loca- tions in Connecticut and New York. In August, Audax Group and Linden Capital Partners acquired Phoenix- based The Core Institute, which has 88 physicians across 25 locations in Arizona and Michigan. As joint replacement volumes rise, the U.S. population ages, and surgi- cal technology becomes increas- ingly precise, PE firms are seeing orthopedic investment as a lucrative opportunity, according to Maria Todd, PhD, director of business development at St. George (Utah) Surgical Center. Dr. Todd said the surge in ortho- pedic PE deals will only help ASCs. "ASCs will soon be reinforced by private equity investments, and hospitals may need to rethink all those orthopedic practices they purchased and surgeons they've hired." n Judge declines to bar former NuVasive employee from taking clients to Alphatec Spine By Angie Stewart A Florida judge denied NuVasive's request to bar a former spine sales representative from soliciting customers on behalf of his new employer, Alphatec Spine, Bloomberg Law reported. NuVasive accused Christopher LeDuff of soliciting its customers and employees for Alphatec Spine — a direct competitor — in violation of common law and noncompete agreements. Two days aer being fired from NuVasive, on Sept. 20, Mr. LeDuff or someone he worked with "provided a hospital within his NuVasive sales territory with pricing for Alphatec's products," NuVasive alleged. "Surgeries in which Alphatec's products will be used are being scheduled even though there is no past history of Alphatec products being used in this hospital." According to Mr. LeDuff 's LinkedIn profile, he joined Alphatec Spine as a managing director in September. NuVasive filed suit on Sept. 23, seeking damages from Mr. LeDuff and an injunction that would bar him from soliciting NuVasive employees and customers or competing with NuVa- sive within his sales territory. e medical devicemaker also sought damages against Gregory Soufleris and Absolute Medi- cal Systems, a company that distributes Alphatec Spine products, for aiding and abetting Mr. LeDuff 's alleged contract violations. Mr. Soufleris, a former NuVasive sales representative who now works for Absolute Medical Systems, allegedly recruited Mr. LeDuff in the summer of 2019 despite knowing about Mr. LeDuff 's noncompete and nonsolicitation contracts. On Nov. 13, Judge Sheri Polster Chappell ruled that NuVasive failed to demonstrate why its noncompete agreement with Mr. LeDuff is necessary to protect business interests and denied the company's request for a preliminary injunction. n