Four medical device makers reached a settlement with the U.S. Department of Justice totaling $311 million to end a probe started in 2005 into the financial relationships between companies and surgeons involving kickbacks. A fifth company will pay no civil settlement but has entered into a nonprosecution agreement with the government.

The medical device makers allegedly offered orthopedic surgeons deals which made them sway decisions on which hip and knee implants to give to patients. The four companies who have to pay settlements are, in order of settlement size: Zimmer which is to pay $169.5 million, DePuy with $84.7 million to pay, Smith & Nephew with some $28.9 million and, last, Biomet with $26.9 million. This brings the total to around $311 million, most of which goes to the Medicare trust fund and some goes to account for the costs of the investigation. They have 18 months to implement specific reforms or else they will be prosecuted for violations of the federal anti-kickback law.

Stryker Corp has managed to strike a deal with prosecutors which puts it under federal monitoring, without paying a settlement, because it voluntarily cooperated with prosecutors before any other company. Stryker also has to implement immediate reforms under its nonprosecution agreement.

"Prior to our investigation, many orthopedic surgeons in this country made decisions predicated on how much money they could make -- choosing which device to implant by going to the highest bidder," U.S. Attorney Christopher Christie said. The government has found that between 2002 and 2006, these five companies, which account for nearly 95 percent of the market for hip and knee surgical implants, have regularly paid surgeons tens to hundreds of thousands of dollars per year for consulting contracts, including trips and other perks.

"With these agreements in place, we expect doctors to make decisions based on what is in the best interests of their patients -- not the best interests of their bank accounts," said Christie.

The settlement will have a positive impact on the companies, as it eliminates an issue which clouded over them since 2005 when the investigation was started. As a result, shares of most of the five companies rose slightly on the news.