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CA Department of Insurance

Olympus Corporation of the Americas agrees to $1.075 million settlement

News: 2017 Press Release

For Release: November 13, 2017
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Olympus Corporation of the Americas agrees to $1.075 million settlement
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones reached a $1.075 million settlement with medical supply company Olympus Corporation of the Americas over alleged illegal kickbacks to physicians, hospital employees and representatives to induce them to purchase Olympus medical equipment and supplies.

"Patients have a right to trust their medical care is based on their treatment needs alone, and not illegal kickbacks to medical providers," said Insurance Commissioner Dave Jones. "Medical professionals should be free from outside influences and inducements when making treatment decisions. We will continue to vigorously enforce the laws against anyone who offers an illegal kickback in exchange for medical equipment purchases, prescriptions of drugs, or medical treatment."

Providing inducements to medical professionals, such as cash or gifts to prescribe or use a specific medication, equipment or supplies, is illegal under the California Insurance Frauds Prevention Act (CIFPA), including California Insurance Code section 1871.7.

The settlement addresses allegations that Olympus violated CIFPA in connection with the sale and marketing of the TJF-Q180V duodenoscopy. For example, the Commissioner alleged that Olympus failed to obtain proper approvals for modifications made to the TJF-Q180V and relatedly failed to disclose an alleged defect in its closed-channel duodenoscopes.

As part of a previous settlement with the federal government, Olympus agreed to change their business and marketing practices and made limited admissions of wrongdoing regarding kickbacks.

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Media Notes:
  • Settlement and Release Agreement
  • This investigation was commenced at the commissioner's initiative, and there is no whistleblower lawsuit alleging a violation of Insurance Code section 1871.7 for the same misconduct. 

Other examples of CDI qui tam settlements:

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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