A Medical Device Daily

AtriCure (Westchester, Ohio), a device company that makes cardiac surgical ablation systems, said it has reached a tentative agreement, subject to completion and approval of a written settlement agreement, with the Department of Justice (DoJ) to resolve the issues raised in the DoJ's investigation and the related qui tam complaint regarding the marketing of the company's surgical ablation devices. The agreement includes AtriCure's assertion that the company and its employees have not engaged in any wrongdoing or illegal activity.

AtriCure has tentatively agreed to pay $3.8 million plus interest over a five-year period. Payments during the five-year period, inclusive of interest, would be $0.5 million, $0.5 million, $0.65 million, $1 million and $1.5 million, respectively. AtriCure has recorded a settlement reserve of $3.8 million related to the agreement in its financial statements for its quarter ended Sept. 30. AtriCure has also agreed, subject to completion and approval of a written agreement, to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.

Of In July, several medical device companies, including AtriCure, were accused of encouraging doctors to use their surgical ablation devices for unapproved uses by offering illegal kickbacks. According to documents in Houston federal court, Boston Scientific (Natick, Massachusetts), Medtronic (Minneapolis), St. Jude Medical (St. Paul, Minnesota), Endoscopic Technologies (San Ramon, California), and St. Jude subsidiary Epicor Medical (Sunnyvale, California) were named in the whistleblower lawsuits (Medical Device Daily, July 17, 2009).

The lawsuits were originally filed in 2007 but were unsealed over the summer by a Texas federal judge. The allegations are related to an inquiry in Texas by the DoJ that was previously disclosed by several of the companies in filings with the Securities and Exchange Commission.