Legal Counsel for Medical Device Manufacturers and Distributors
Our medical device manufacturers and distributors practice area is staffed with highly knowledgeable and experienced health care fraud attorneys. They will be able to guide you from the accusation to settlement or trial, and will be an essential part of you getting the best result possible in your case.
Health care fraud has put a strain on the United States economy in recent years. Each year, federal health care programs pay out hundreds of millions of dollars in fraudulent claims. Because of this, the United States government and its various agencies have begun cracking down on those who are alleged to have committed health care fraud.
Medical device manufacturers and distributors face the same scrutiny as medical professionals. They are relied on by many practitioners to provide not only a good product but also to provide accurate information about the intended use of the product.
They are expected to provide information as to how bill health care programs for the product’s use and the procedures it requires. Providing incorrect information to practitioners means medical device manufacturers and distributors could face allegations of health care fraud.
Which Health Care Fraud Laws are Applicable to Manufacturers and Distributors of Medical Devices?
There are several federal statutes that make up what is collectively known as health care fraud in the United States.
While they are all designed to address health care fraud from every corner of the medical industry, there are some that are more applicable to medical device manufacturers and distributors.
Criminal Health Care Fraud (18 U.S.C. §1347)
This is aimed to punish those who knowingly and willfully execute, or attempt to execute, anything that would defraud a health care benefit program of any money or other property under that program’s control.
If you are found guilty of criminal health care fraud you could face up to 10 years in prison and up to 20 years if someone dies as a result of the fraud. Additionally, you may face fines of up to double the amount of the property you received as a result of the fraudulent scheme.
The False Claims Act (31 U.S.C., Chp. 37)
This statute is used to sue those professionals in occupational therapy offices who purposefully submit fraudulent or false claims to insurance companies in order to receive a payment.
For example, if a gastroenterologist bills a patient’s insurance company for an endoscopic exam that was never actually provided to that patient, that physician may be charged with fraud under the False Claims Act. Violators of the False Claims Act face fines between $5,000 to $10,000. Additionally, they can be ordered to pay up to 3 times the amount that the government was defrauded of as a result of the scheme.
The Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b))
This statute addresses the intentional payments made to reward people or companies for patient referrals or the generation of business involving any item or service payable by the federal health care programs, including Medicare and Medicaid.
For example, if an orthopedic surgeon pays a general practitioner to specifically refer patients with Medicare, this would be a violation of the Anti-Kickback Statute. Those found guilty of violating this statute face fines up to $25,000.00, as well as a prison sentence of up to five years.
Medical Device Manufacturers and Distributors and Health Care Fraud in the News
Medical Device Maker AngioDynamics Agrees to Pay $12.5 Million to Resolve False Claims Act Allegations
In July 2018, AngioDynamics Inc., a New York-based medical device manufacturer, agreed to pay $12.5 million to the government to resolve allegations that the company caused healthcare providers to submit false claims to federal health care programs.
The allegations related to two of AngioDynamics’s medical devices: LC Bead and the Perforator Vein Ablation Kit (PVAK).
The government alleged that from mid-2006 until the end of 2011, AngioDynamics served as the U.S. distributor for Biocompatibles plc, which manufactured the LC Bead. The LC bead was marketed as being a ‘better,’ ‘superior,’ ‘safer,’ and ‘less toxic’ way to deliver chemotherapy. The Food and Drug administration twice declined to approve LC Bead because there was insufficient evidence to support these claims.
AngioDynamics was also accused of being aware that many insurers declined to provide coverage for the LC Bead and some procedures related to it. As a result, AngioDynamics allegedly instructed healthcare providers to use inaccurate billing codes when submitting claims so that the procedures would be covered.
Additionally, after being denied approval by the FDA for the use of PVAK to treatment in perforator veins, it is alleged that AngioDynamics recalled the devices and reissued them under a new name, the 400-micron kit.
The 400-micron kit made no mention of the unapproved use regarding perforator veins, but it was alleged that employees of AngioDynamics were instructed to continue to market it as such. As a part of this alleged activity, the company told health care providers that Medicare would cover this use when in actuality, it would not.
For more information and for the full Department of Justice (DOJ) press release, click this link or copy and paste the URL below.
Medical Device Manufacturer Acclarent Inc. to Pay $18 Million to Settle False Claims Act Allegations
In July 2016, Acclarent Inc., a medical device manufacturer, agreed to pay $18 million after being accused of causing health care providers to submit false claims to several federal health care programs including Medicare.
Acclarent Inc. marketed and delivered the Relieva Stratus MicroFlow Spacer (Stratus) to be used as a drug delivery device, despite it lacking approval by the United States Food and Drug Administration (FDA) for that use.
By 2013 Acclarent had stopped all sales of Stratus and withdrew all FDA marketing clearances. The Stratus is no longer commercially available in the United States.
For more information and for the full DOJ press release, click this link or copy and paste the URL below.
Call a Trusted Healthcare Attorney Before It Is Too Late!
If you are a medical device manufacturer or distributor and you have been accused of health care fraud, contact an experienced health care attorney as soon as possible.
A knowledgeable attorney will ensure that your right and interests, as well as the rights and interests of your patients and buyers, are protected at every stage of the proceedings. Our attorneys are trained to help you when you need it most.