The spinal unit of Medtronic Inc. will pay $75 million ....

The spinal unit of  Medtronic Inc. will pay $75 million to settle allegations that it defrauded Medicare by telling doctors they could bill for an inpatient stay when a cheaper outpatinet visit would have sufficed. The allegations were originally made against Kyphon, Inc., which Medtronic bought in November for $4.2 billion. Medtronic announced that the case was disclosed in filings before the acquisition and that the settlement amount had been reserved on its books. The company admitted no wrongdoing. Kyphon sold a kit for surgery to treat spinal compression fractures caused by osteoporosis, cancer, or lesions. Attorney Mary Louise Cohen, one of those who brought the case, said Kyphon charged $3,500 to $5,500 for each kit. It was able to keep prices that high by telling doctors they could admit patients, sometimes overnight, when a simple outpatient procedure was all that was needed. Kyphon would only train doctors who had admitting priveledges at their hospitals. The lawsuit was brought under the federal False Claims Act, which allows whistleblowers to sue on the government's behalf.