Medical Devices and DME
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November 7, 2019
Medical device manufacturer Life Spine Inc. has agreed to pay $5.5 million to settle fraud allegations stemming from a qui tam suit, with founder and CEO Michael Butler agreeing pay another $375,000, and VP of business development Richard Greiber agreeing to pay another $115,000. As part of the settlement, the defendants admitted to paying kickbacks to surgeons and entities between 2012 and 2018 in exchange for their use of Life Spine’s spinal implants, devices, and equipment. USAO SDNYOctober 28, 2019
Sanford Health, Sanford Medical Center, and Sanford Clinic have agreed to pay $20.25 million and enter into a Corporate Integrity Agreement in order to resolve alleged violations of the Anti-Kickback Statute and False Claims Act. Despite warnings by several physicians that a top neurosurgeon was illegally profiting off his use of implantable medical devices as well as performing medically unnecessary surgeries involving the devices, Sanford did nothing to stop the offender, allowing Medicare and Medicaid to continue being defrauded. The allegations were raised by Sanford surgeons Drs. Carl Dustin Bechtold and Bryan Wellman, who will share in a $3.4 million cut of the settlement proceeds. DOJ; USAO SDOctober 17, 2019
Johnson & Johnson and its subsidiary, Ethicon, Inc., have agreed to pay $116.9 million to 41 states and the District of Columbia for endangering the health of women nationwide by deceptively marketing transvaginal surgical mesh devices and failing to adequately disclose possible serious complications. A multistate investigation found that both Johnson & Johnson and Ethicon knew of the risks—including chronic pain and inflammation, fistula formation, incontinence, and mesh extrusion and erosion into the body—yet failed to warn consumers or their physicians. As part of the settlement, the companies must refrain from falsely describing the mesh as “FDA approved,” as well as provide full disclosure of the device’s risks. DE AG; PA AG; MI AG; NY AG; SC AG; TX AGSeptember 26, 2019
The Biomedical Research Foundation of Northwest Louisiana, together with related entities and the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, which operate University Health Hospital in Shreveport, Louisiana, will pay $530,000 to resolve claims that they submitted improper claims for implantable automatic defibrillators. To be reimbursed for the procedures, Medicare requires providers and hospitals to submit data regarding them to a qualified registry, so that the procedures can be further studied; University Health Hospital failed to make the required data submissions. The investigation was initiated by a qui tam lawsuit filed by a whistleblower under the False Claims Act. USAO WD LASeptember 17, 2019
Physician Alliance Ltd. (PAL) and its medical director agreed to pay $178,000 to resolve False Claims Act allegations for improperly billing Medicare for providing patients with electric acupuncture medical devices that is affixed behind patients' ears. Since Medicare does not reimburse for acupunctural devices, PAL allegedly billed Medicare for the “implantation of neurostimulator electrodes,” a procedure that requires surgery and for which Medicare reimburses in the thousands of dollars. The case was investigated out of the Eastern District of Pennsylvania. DOJSeptember 17, 2019
Physician Alliance Ltd. and Richard Frey, D.O. will pay $178,400 to resolve allegations that they submitted false claims to Medicare. When defendants provided patients with "P-Stim" devices, which are worn on a patient's ear and marketed as an acupuncture treatment, they billed Medicare for the implantation of neurostimulator electrodes, which is a surgical procedure for which Medicare reimburses thousands of dollars. By contrast, Medicare does not reimburse for acupuncture or acupuncture devices. USAO EDPASeptember 13, 2019
Medical device manufacturer Avalign Technologies, Inc. and its subsidiary Instrumed International, Inc., will pay $9.5 million to resolve allegations that the companies unlawfully marketed devices not properly approved by the FDA for use in spinal surgeries, circumcisions, and other medical procedures, with knowledge that the devices did not have the required FDA approvals. The allegations were originally made in False Claims Act action brought by a whistleblower. USAO SDNYAugust 29, 2019
A healthcare executive in Tennessee has been sentenced to 3.5 years in prison and ordered to forfeit nearly $600,000 for her role in a $4.6 million illegal kickback scheme. In pleading guilty to violating the Anti-Kickback Statute, Brenda Montgomery admitted that she paid the CEO of Comprehensive Pain Specialist (CPS), John Davis, a 60% cut of Medicare reimbursements—amounting to more than $770,000—for arranging the referrals of durable medical equipment. As a result of the scheme, Montgomery herself received fraudulent reimbursements amounting to as much as $2.9 million. USAO MDTNCatch of the Week — Wound Care Device Manufacturer ACell Inc.
Posted 06/14/19
