Boston Scientific Corp. has lost its bid to dismiss a whistleblower claim accusing it of improperly billing Medicare for spinal cord stimulator supplies.

On Dec. 15 a federal judge in Newark denied the motion by company subsidiary Boston Scientific Neuromodulation Corp. to dismiss qui tam claims by two former billing department employees.

The ruling by U.S. District Judge John Michael Vazquez was one of a trio issued in the case on Dec. 15, and the judge ruled largely in favor of the plaintiffs.

Vazquez also granted, in part, the motion by plaintiffs Wendy Bahnsen and Carolina Fuentes to dismiss Boston Scientific's counterclaims against them for breaching contract terms concerning removal of files from the premises. While Bahnsen and Fuentes were found to have violated company policy by removing work files from the Boston Scientific office where they worked, Vazquez dismissed that claim on public policy grounds.

However, Vazquez declined to dismiss a claim against Fuentes for copying the contents of her company computer on a thumb drive, finding a genuine dispute as to whether her actions violated her employment agreement.

And Vazquez also granted the plaintiffs' motion to disqualify two of Boston Scientific's four proposed expert witnesses, but the judge denied the company's motion to disqualify the plaintiffs' two experts.

On Dec. 18, Vazquez ordered the parties to attend a Jan. 9, 2018, settlement conference, requiring attendance by all parties with settlement authority.

Filed in 2011, the suit concerns a spinal cord stimulator the company makes for treatment of back pain. The plaintiffs claimed that Boston Scientific knowingly submitted false bills to Medicare from 2006 to 2010 for the stimulators and related products, and claims for off-label uses of the product. The company allegedly made false claims that it had obtained certificates of medical necessity, knowingly submitting bills with false diagnosis codes, and falsely certified compliance with billing laws and regulations.

Bahnsen and Fuentes, who worked in Boston Scientific's Valencia, California, office, estimate that the total amount of falsified bills to Medicare involved tens of millions of dollars, according to their complaint. Both complained to their supervisors about the company's illegal billing practices, and both were fired—Bahnsen in October 2009 and Fuentes in June 2010.

Vazquez said Boston Scientific raised a dispute of material fact over whether Fuentes' copying of the contents of her work computer in 2008 breached her employment agreement. The company correctly noted that, at the time she copied the information, she did not intend to bring a False Claims Act suit, according to Vazquez.

But he found no such dispute over Bahnsen's and Fuentes' copying and removal of company documents in 2009. The plaintiffs argued that public policy excuses any breach of company policy resulting from their 2009 actions. Boston Scientific asserted that the plaintiffs' violations of company policy exceeded the scope of FCA protection, because they indiscriminately took irrelevant, confidential documents for purposes other than bringing a FCA case. But the defendant did not provide evidence to support that assertion, Vazquez said.

The plaintiffs said they did not remove the documents until after consulting with attorneys and a former FCA whistleblower. Boston Scientific does not allege that documents taken in 2009 were intended or used for any purpose other than to bring a FCA case, Vazquez said.

Boston Scientific, based in Marlborough, Massachusetts, is a developer of medical devices.

Felice Galant, of Norton Rose Fulbright in New York, who represented Boston Scientific, did not immediately return a call seeking comment. A Boston Scientific spokeswoman, Catherine Brady, said in an e-mail message, “the decision means that the case remains active. We believe that the case does not have merit and plan to continue to aggressively defend it.”

Local counsel for the plaintiffs, Grant McGuire of Tompkins, McGuire, Wachenfeld & Barry in Roseland, referred an inquiry to Arun Subramanian of Susman Godfrey in New York, who declined to comment.