Missouri Surgeon and Kansas Distributor Plead Guilty to Kickbacks

The Department of Justice (DOJ) reported the settlement of a kickbacks scheme involving a Missouri surgeon and Kansas distributor as well as obstruction charges relating to the investigation of the scheme.

Jason Montone, D.O., was a spine surgeon practicing in Missouri and Kansas. From 2012 to 2015, a medical device company paid Dr. Montone $379,000 pursuant to a sham consulting agreement. The medical device company purportedly paid Dr. Montone for providing technical feedback on its products. The company actually used the consulting fees to induce him to use its products.

In 2017, Dr. Montone created false documents purportedly showing work he performed pursuant to the sham consulting agreement and produced the documents in response to the Anti-Kickback Statute investigation. In 2018, he knowingly provided false information related to the investigation.

Dr. Montone has agreed to plead guilty to conspiracy to violate the Anti-Kickback Statute and obstruction of a criminal health care fraud investigation. Pursuant to the terms of Dr. Montone’s plea agreement, the government agreed to recommend incarceration at the low end of the sentencing guidelines, 12 months of supervised release, a mandatory special assessment, a fine, restitution, and forfeiture of $379,000. The forfeiture amount is the amount Dr. Montone received in sham consulting fees.

John Balzer was the owner of Kansas-based BIOinnovations, LLC, a distributor for medical device manufacturers. From 2012 to 2015, the medical device company agreed to pay Balzer a commission on all of its products that Dr. Montone used in his surgeries.

In 2019, Balzer advised Dr. Montone to tell the U.S. Attorney’s Office and the grand jury that he had provided legitimate consulting services and that he was “surprised” that the medical device company was missing documentation of his consulting work. Balzer knew this was not true.

Balzer has agreed to plead guilty to conspiracy to violate the Anti-Kickback Statute and tampering with a witness, victim, or an informant. In accordance with the terms of Balzer’s plea agreement, the government agrees to recommend incarceration at the low end of the sentencing guidelines, 12 months of supervised release, a mandatory special assessment, restitution, and forfeiture of $1,264,501. The forfeiture amount is the amount Balzer received in the scheme.

Federal law prohibits individuals and entities from paying physicians in exchange for them using their devices in surgeries or other medical procedures paid for by government-funded healthcare programs, such as Medicare and Medicaid.

U.S. Attorney Andrew E. Lelling stated, “Kickbacks paid to influence physicians are illegal and incompatible with a properly functioning health care system.”

Lelling continued, “We will take all necessary steps to ensure that patients receive, and the government pays for, health care that is based solely on sound medical judgment, not compromised by kickbacks.”