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Medtronic settles U.S. probe over doctor kickbacks

WASHINGTON (Reuters) - Medtronic Inc has agreed to pay $23.5 million to settle allegations that it paid kickbacks to doctors to encourage them to use its pacemakers and defibrillators, the U.S. Justice Department said on Monday.

The company was accused of seeking physicians to participate in studies and registries and paying doctors fees of between $1,000 to $2,000 per patient for information and data collected as long as they used Medtronic's devices, according to the Justice Department.

Medtronic caused false claims to be submitted to the federal healthcare programs Medicare and Medicaid, the Justice Department said. The settlement resolves two whistleblower lawsuits against the company.

"Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers," Tony West, assistant attorney general for the Justice Department's civil division, said in a statement.

The company previously disclosed the anticipated settlement and recorded a $24 million expense in its 2011 fiscal year, according to its securities filings.

"We are happy that the investigation is behind us so we can continue to design and execute clinical trials that generate evidence to improve patient care, outcomes and cost effectiveness," said Medtronic spokesman Chris Garland.

The resolution comes as Medtronic is facing another probe by the Justice Department and the U.S. Senate over questions about whether doctors who were paid by the company failed to report significant side effects of its spinal surgical product called Infuse.

(Reporting by Jeremy Pelofsky in Washington, editing by Phil Berlowitz)