Medical Devices and DME

June 29, 2017

Innovative Therapies, Inc. and its parent company Cardinal Health, Inc. agreed to pay roughly $2.7 million to settle charges they violated the False Claims Act by submitting false claims to Medicare through their marketing of certain negative pressure wound treatment devices as durable medical equipment when they knew these devices did not have the expected life of a durable device.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a former ITI employee.  The whistleblower will receive an award of $488,700 from the proceeds of the government's recovery.  DOJ (MDTN)

June 15, 2017

Magdiel Garcia and the durable medical equipment company he owned, MAK Healthcare PC (d/b/a Multicare Plus), agreed to pay $225,000 to settle claims they violated the False Claims Act and The Stark Law by improperly self-referring Medicare beneficiaries for services and equipment to MAK. DOJ (EDPA)

May 8, 2017

Kansas medical equipment supplier Pos-T-Vac, Inc. agreed to pay $1 million to settle allegations it violated the False Claims Act by charging Medicare for vacuum supplies not medically necessary, lacking documentation of medical necessity, and/or not properly ordered by a physician. DOJ (DKS)

April 25, 2017

Braden Partners, L.P. (d/b/a Pacific Pulmonary Services) agreed to pay $11.4 million to resolve allegations against it and its general partner, Teijin Pharma USA LLC, for violating the False Claims Act by submitting claims for reimbursement to Medicare and other federal healthcare programs for oxygen and related equipment supplied in violation of program rules, and for sleep therapy equipment supplied as part of a cross-referral kickback scheme with sleep clinics. According to the government, Pacific Pulmonary submitted claims to the Medicare, TRICARE and Federal Employee Health Benefits programs for home oxygen and oxygen equipment without obtaining the required physician authorization. The government further charged that certain of the company’s patient care coordinators agreed to make patient referrals to sleep testing clinics in exchange for those clinics’ agreement to refer patients to Pacific Pulmonary for sleep therapy equipment in violation of the Anti-Kickback Act. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Manuel Alcaine, a former sales representative of Pacific Pulmonary. Mr. Alcaine will receive a whistleblower award of roughly $1.8 million from the proceeds of the government's recovery. DOJ

January 12, 2017

Indiana-based manufacturer of orthopedic and dental implant devices Zimmer Biomet Holdings Inc. agreed to pay a $17.4 million criminal penalty in connection with a scheme to pay bribes to government officials in Mexico and for violations of the internal controls provisions of the Foreign Corrupt Practices Act involving the company’s operations in Mexico and Brazil. By failing to require appropriate due diligence and documentation and contracts for payments to third parties, Biomet allowed its Mexican subsidiary Biomet 3i Mexico S.A. de C.V. to pay bribes to Mexican customs officials through customs brokers and sub-agents so 3i Mexico could import contraband dental implants into Mexico. Importing those products into Mexico violated Mexican law because they lacked proper registration or labeling. In related proceedings, the company also agreed to pay the SEC disgorgement of $6.5 million including pre-judgment interest and $6.5 million as a civil penalty. DOJ

January 11, 2017

Ireland-based Shire Pharmaceuticals LLC and certain subsidiaries agreed to pay $350 million to settle charges that Shire and the company it acquired in 2011, Advanced BioHealing violated the False Claims Act and Anti-Kickback Statute by using kickbacks and other unlawful methods to induce clinics and physicians to use or overuse their “Dermagraft” skin product. It is the largest False Claims Act recovery in a kickback case involving a medical device, and resolves claims brought by the federal government along with 37 states and the District of Columbia. The States will receive $6,104,000 for the State share of the Medicaid program. According to the government, Dermagraft salespersons unlawfully induced clinics and physicians with lavish dinners, drinks, entertainment and travel; medical equipment and supplies; unwarranted payments for purported speaking engagements and bogus case studies; and cash, credits and rebates. The allegations originated in six lawsuits filed brought by whistleblowers in, or transferred to, the United States District Court for the Middle District of Florida. Two of the qui tam actions named New York and other states and included allegations that Shire submitted or caused to be submitted false claims to the Medicaid program under federal and state False Claims Acts. The whistleblowers will receive a yet-to-be-determined whistleblower award from the proceeds of the government recovery. Whistleblower Insider, NY, FL

January 6, 2017

Constantine Cannon Announces a $2.6 Million Whistleblower Settlement With Bay Sleep Clinic.  Click here for the press release.

December 14, 2016

Florida announced a million dollar settlement reached with an obstetrician and gynecologist in Ocala. Dr. Rasiklal Dhanji Nagda is a Medicaid provider and owner of Nagda Medical, Inc. According to Attorney General Bondi’s Medicaid Fraud Control Unit’s investigation, Nagda submitted more than 700 claims to Medicaid for intrauterine devices not approved by the Food and Drug Administration, and received reimbursements from the Medicaid program. Nagda allegedly used a credit card to order large quantities of Bayer’s Mirena IUDs from an online pharmacy, GetCanadianDrugs.com, on a monthly basis. FL

November 7, 2016

Pennsylvania-based medical device manufacturer Biocompatibles Inc., a subsidiary of British-based BTG plc, pleaded guilty and agreed to pay more than $36 million for violating the False Claims Act and Food, Drug and Cosmetic Act by misbranding its embolic device LC Bead, which is used to treat liver cancer, among other diseases, and by marketing and selling the product for uses not approved by the FDA.  The matter originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Ryan Bliss who oversaw Bicompatibles’ North American marketing.  He will receive a whistleblower award of approximately $5.1 million from the proceeds of the government’s False Claims Act recovery.  Whistleblower Insider