Abbott Laboratories, Abbott Park, Ill., today agreed to pay $614.5 million to settle criminal and civil fraud charges that its Ross Products Division paid kickbacks to win business and showed customers how to fraudulently bill Medicare and Medicaid for equipment. Another Abbott unit, CG Nutritionals, pleaded guilty to obstructing a criminal investigation and will be permanently excluded from Medicare and Medicaid. As part of the civil settlement Abbott will pay more than $400 million. The company also will pay a $200 million criminal fine. The National Association of Medicaid Fraud Control Units has inked a $14.5 million settlement to reimburse state Medicaid departments for their losses in the fraud. The plea agreement requires Abbott to fully cooperate in an ongoing government investigation known as Operation Headwaters, a white-collar sting operation operated by the federal government. It is the first criminal conviction to come from the investigation jointly operated by the FBI, HHS' inspector general and the U.S. Postal Service. Last month Abbott disclosed in filings it had reserved a $622 million charge in anticipation of the proposed settlement. The settlement was approved at a hearing in U.S. District Court this afternoon.
Abbott spokespersons declined to comment. -- by Mark Taylor