Appeals Court Declines to Reconsider Biotronik Whistleblower Case Reinstatement

In a significant development for corporate whistleblower litigation, the Ninth Circuit Court of Appeals has declined Biotronik Inc.’s request for a full court review of a September decision that revived a previously dismissed whistleblower lawsuit against the medical device manufacturer.

The court on Monday rejected Biotronik’s petition for an en banc rehearing, effectively standing by the three-judge panel’s earlier ruling that allowed the whistleblower case to proceed. This decision marks another chapter in what has become a closely watched legal battle in the healthcare industry.

Biotronik, a privately-held medical device company specializing in cardiovascular products including pacemakers and defibrillators, has been fighting allegations brought forth under the False Claims Act. While specific details of the whistleblower’s claims remain partially sealed, the case is understood to involve allegations of improper billing practices or potential kickback schemes related to Medicare and Medicaid reimbursements.

The original whistleblower complaint was dismissed at the district court level before the Ninth Circuit’s September ruling reversed that decision, breathing new life into the case. Whistleblower suits in the medical device industry typically allege violations of federal regulations that prohibit companies from offering financial incentives to healthcare providers for using their products when those costs are ultimately billed to government healthcare programs.

Legal experts note that the denial of an en banc review signals the appellate court’s confidence in its original decision. En banc hearings, which involve review by all active judges on the circuit rather than the standard three-judge panel, are relatively rare and typically reserved for cases involving exceptionally important questions of law or instances where panel decisions conflict with precedent.

“The Ninth Circuit’s decision to maintain its reversal without full court review suggests they see clear merit in allowing this whistleblower claim to proceed to trial,” said Eleanor Hamburger, a healthcare fraud expert not involved in the case. “This represents a significant procedural victory for the whistleblower.”

The medical device industry has faced increasing scrutiny in recent years from both regulators and whistleblowers. According to the Department of Justice, healthcare fraud cases accounted for more than $1.8 billion in False Claims Act settlements and judgments in the past fiscal year, with medical device companies representing a substantial portion of those recoveries.

For Biotronik, which competes with industry giants like Medtronic and Boston Scientific in the cardiac rhythm management market, the ongoing litigation poses both financial and reputational risks. The company has consistently denied any wrongdoing in court filings.

The case will now return to the district court for further proceedings, where the whistleblower’s specific allegations will be tested through the discovery process and potentially at trial. False Claims Act cases carry the possibility of treble damages—three times the amount of fraudulent claims—plus additional penalties, making them particularly concerning for defendants.

Whistleblower lawsuits under the False Claims Act also include provisions for qui tam relators—the whistleblowers themselves—to receive a percentage of any recovery, typically between 15 and 30 percent. This financial incentive has driven a steady increase in healthcare-related whistleblower litigation over the past decade.

The identity of the whistleblower in the Biotronik case remains under seal in accordance with False Claims Act procedures, which protect whistleblowers from potential retaliation while the government evaluates whether to intervene in the case.

Neither Biotronik’s attorneys nor the whistleblower’s counsel responded to requests for comment on the Ninth Circuit’s decision. The Department of Justice, which has the option to intervene in False Claims Act cases, has not yet indicated whether it will take an active role as the case moves forward.

This development comes at a time when regulatory oversight of the medical device industry continues to intensify, with both the FDA and CMS implementing stricter compliance requirements for companies selling products reimbursed through federal healthcare programs.