Medical Devices and DME

November 19, 2020

Johnson & Johnson (J&J) subsidiary Medical Device Business Services, Inc. (MDBS) has agreed to pay $10 million to settle allegations that a former J&J subsidiary, Therakos, Inc., promoted two medical devices for unapproved uses in pediatric patients.  A second entity, The Gores Group (TGG), agreed to pay $1.5 million to settle allegations of continuing to promote the devices for unapproved uses after it acquired Therakos in 2012.  In an action initiated by a whistleblower, the government alleged that between 2006 and 2015, Therakos improperly promoted its extracorporeal photopheresis (ECP) systems, used to treat cutaneous T-cell lymphoma, for use in children despite the fact that no ECP devices had been approved for that population.  In so doing, Therakos allegedly caused false claims to be submitted to Medicaid, the Federal Employee Health Benefits Program, and TRICARE, in violation of the False Claims Act.  The total settlement funds were divided between federal and state governments.  USAO EDPA; CA

October 29, 2020

Medtronic has agreed to pay over $9.2 million to resolve allegations of violating the False Claims Act and CMS’s Open Payments Program by paying kickbacks to a South Dakota-based neurosurgeon, Wilson Asfora, M.D., in order to induce sales of its SynchroMed II implantable intrathecal infusion pumps.  According to the government, Medtronic allegedly sponsored nine years’ worth of events at a restaurant owned by Asfora, and to which Asfora would invite his acquaintances, business partners, trusted colleagues, and referral sources.  For his role in the kickback scheme, Asfora has been named in a separate FCA lawsuit, which the United States joined last November.  USAO SD

October 14, 2020

Medical device maker Merit Medical Systems Inc. will pay $18 million to resolve claims first brought by a whistleblower under the False Claims Act that the company paid unlawful kickbacks to doctors and hospitals to induce them to use MMSI’s EmboSphere and QuadraSphere devices for embolization procedures.  MMSI was alleged to have offered hospitals and providers with millions of dollars in free advertising assistance, “educational” grants, and other services based on the providers’ past sales and to induce future sales.  The whistleblower, Charles J. Wolf, M.D., who will receive $2.65 million, was the Chief Compliance Officer for the company; according to DOJ, he repeatedly warned MMSI that its practices violated the Anti-Kickback Statue.  DOJ; USAO NJ; NC AG

September 24, 2020

Transvaginal surgical mesh device manufacturer C.R. Bard, Inc. and its parent company, Becton, Dickinson and Company, have agreed to pay $60 million to 48 states and the District of Columbia to resolve allegations of deceptively marketing the devices.  The company’s surgical mesh—which are permanently implanted to hold up falling organs, and which are extremely difficult or impossible to remove—had life-altering side effects that they failed to disclose, including chronic pain, recurring infections, and shrinking tissue.  Although the devices were taken off the market in 2016, under the terms of the settlement, C.R. Bard and Becton, Dickinson and Company are required to adhere to certain injunctive terms if they choose to reenter the market.  The funds received as part of this settlement will be added to a larger restitution fund that was established after settlement of a similar case with Johnson & Johnson in 2019.  CA AG; FL AG; WA AG

September 10, 2020

Shreveport Prosthetics, Inc. will pay $1.6 million to resolve claims in an action brought by the company’s former office administrator, Kimberly Throgmorton, under the qui tam provisions of the False Claims Act.  The company was alleged to have submitted false bills to Medicare by using the supplier number of a different company after its own supplier number was deactivated, and by routinely waiving patient co-payments.  Ms. Throgmorton will receive over $250,000 as a whistleblower reward.  USAO WD LA

August 21, 2020

A Georgia-based chiropractor and her medical practice have been ordered to pay more than $5 million for violating the False Claims Act.  The government alleged that Dr. Jennifer Heller, D.C. caused Medicare to pay $1.4 million more than it would have had it known that hundreds of Heller’s charges for a surgical neurostimulator procedure were in actuality for acupuncture devices, which are not covered by Medicare, and which do not require surgery.  To resolve the charges, Heller Family Medicine, LLC will have to pay $4.3 million, while Heller herself will have to pay $700,000.  USAO SDGA

April 6, 2020

Following a $7.1 million settlement with seven co-defendants in October 2019, a chiropractor in New Jersey who allegedly concocted the scheme to bill Medicare for medically unnecessary injections and knee braces has agreed to pay $2 million to resolve his liability.  A critical analysis of Medicare claims data revealed that while treating for osteoarthritis, David Podell caused his clinic and seven Osteo Relief Institutes to bill Medicare for viscosupplementation injections—gel-like fluids injected into the knee that act as lubricant—as well as custom knee braces for beneficiaries who did not need them.  Additionally, the claims for the custom knee braces were tainted by illegal kickbacks that Podell solicited and received from the manufacturer.  DOJ; USAO MN

March 4, 2020

The Massachusetts-based marketers of an electrical nerve stimulation device have settled FTC false advertising charges by agreeing to pay at least $4 million.  In marketing materials for Quell, NeuroMetrix, Inc. and CEO Shai Gozani allegedly described the device as "clinically proven" and "FDA cleared" for chronic pain relief all over the body, despite lacking scientific evidence or actual FDA approval to support such claims.  In addition to a cease and desist order and the $4 million judgment, NeuroMetrix has also been ordered to turn over another $4.5 million in future foreign licensing payments.  FTC