Medical Device Manufacturer Settles False Billing Allegations for up to $5.25 Million

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On February 19, 2014, the DOJ announced it reached a settlement with EndoGastric Solutions, Inc. (EndoGastric) to resolve a pending False Claims Act (FCA) suit.  EndoGastric manufactures and sells a medical device called EsophyX, which was developed for use in an alternative, less invasive procedure for gastroesophageal reflux disease (GERD) treatment.  The Government alleged that EndoGastric misled healthcare providers about how to bill for procedures using EsophyX. 

According to the Government, EndoGastric knowingly caused providers to submit claims using procedure codes applicable to a more invasive procedure (which provided a higher level of reimbursement), rather than an appropriate, less invasive procedure code.  The Government further alleged that EndoGastric violated the Anti-Kickback Statute by knowingly paying illegal remuneration to certain physicians for participation in patient seminars and co-marketing agreements to induce the physicians to use EsophyX. 

To settle the allegations, EndoGastric agreed to pay up to $5.25 million and enter into a Corporate Integrity Agreement (CIA) with the OIG, available by clicking here.  The relator, a former employee of EndoGastric, will receive up to $945,000 as a result of the settlement.  To view the DOJ Press Release click here.  To view the FCA Complaint click here and the FCA Settlement Agreement click here.

Reporter, Isabella Edmundson, Atlanta, + 1 404 572 3527, iedmundson@kslaw.com.

Topics:  DOJ, Enforcement Actions, False Billing, Medical Devices, Settlement

Published In: Health Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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