Medical Device Company to Pay $700,000 to Settle FCA Whistleblower Case

Medical device manufacturer THD America Inc., along with its parent company, THD SpA of Italy, have agreed to pay $700,000 to resolve False Claims Act allegations that THD caused physicians to submit improper billing codes to Medicare and Medicaid for its novel hemorrhoid removal kit (the “Kit”).

According to the government, THD sells the Kit to colorectal surgeons to assist in the cauterization and removal of hemorrhoids. THD’s kit requires the use of a “T-Code” or temporary code reserved for new and emerging services. Because a procedure that is assigned such a code is considered experimental, Medicare and Medicaid often denied reimbursement for the Kit.

The government alleged that THD circumvented Medicare and Medicaid rules by encouraging physicians to use additional CPT codes likely to be reimbursable along with the T-Code or to substitute alternative CPT codes altogether. According to the government, this resulted in Medicare and Medicaid paying hundreds of thousands of dollars in false claims. THD agreed to pay $700,000 to settle the allegations.

“The integrity of federal healthcare programs depends upon compliance with coding and billing rules that are used to make coverage and reimbursement decisions,” said Principal Deputy Assistant Attorney General Brian M. Boynton.

“This case is emblematic of the U.S. Attorney’s Office’s commitment to pursuing and holding accountable those who seek to defraud federal health care programs and to recouping taxpayer dollars obtained falsely,” said U.S. Attorney Erek L. Barron for the District of Maryland.

Special Agent in Charge Maureen Dixon of the Department of Health and Human Services Office of the Inspector General stressed, “HHS-OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate allegations of companies violating the federal False Claims Act.”

If you have information about potential Healthcare Fraud or would like to learn more about what it takes to become a whistleblower, you can speak to an experienced Constantine Cannon whistleblower lawyer team member. Please don’t hesitate to contact us for a free and confidential consultation.