(LEGAFI) -- An appeals court has given the green light to a whistleblower lawsuit against implant maker Blackstone Medical over allegations that the company’s payments to spine surgeons defrauded Medicare.

Former regional manager Susan Hutchenson filed the whistleblower lawsuit against Blackstone Medical after being terminated in 2006. She alleges the company violated the False Claims Act by creating a scheme through which surgeons nationwide were paid in exchange for using the company's products in their surgeries. 

The Blackstone Medical whistleblower lawsuit alleges that surgeons were offered “monthly payments under sham consulting agreements; paid development projects; research grants; royalties; exorbitant and sometimes illicit entertainment expenses; high-end travel and accommodations; speaking engagements and seminars and other illegal incentives.”

The whistleblower lawsuit argues that since many surgeons used Blackstone’s implants in Medicare and Medicaid patients’ surgeries, these payments constituted violations of the False Claims Act, a federal law that prohibits any party from knowingly making fraudulent claims for government payment. Under qui tam provision of FCA, if the government joins a whistleblower lawsuit, the whistleblower can receive a portion of the recovery if one is made.