A Medical Device Daily

Rochester Medical (Stewartville, Minnesota) reported that it along with Covidien (Boulder Colorado,) have reached a settlement to the litigation which Rochester Medical filed on March 16, 2004, against C.R. Bard (Murray Hill, New Jersey); Tyco International (Pembroke, Bermuda).; Tyco Healthcare Group (Mansfield, Massachusetts); Novation (Irving, Texas); VHA (also Irving); and Premier Purchasing Partners (Charlotte, North Carolina).

Under the terms of the settlement, Rochester Medical is dismissing Tyco International, Tyco Healthcare Group and Covidien from the litigation with prejudice, and Covidien, which is the successor company to Tyco Healthcare, is paying Rochester Medical a total of $3.5 million, out of which Rochester Medical will pay roughly $2.5 million in attorneys' fees and expenses.

The impact of the settlement will be reflected in the company's second-quarter financials. Rochester Medical has previously announced settlement agreements with all other defendants in the case.

The Lanier Law Firm and Patton, Tidwell, & Schroeder represented Rochester Medical.

Rochester Medical manufactures disposable medical catheters and devices for urological and continence care applications. The company markets under its own Rochester Medical brand and under existing private-label arrangements.

In other legalities:

The owners and operators of two Miami medical clinics, along with a phlebotomist at one of the clinics, have pleaded guilty to defrauding the Medicare program in connection with a $5.3 million HIV and cancer infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida reported.

Juan "Tony" Marrero, Belkis Marrero and Luz Borrego each pleaded guilty on Jan. 14 to conspiracy to commit healthcare fraud before U.S. District Judge Ursula Ungaro in the Southern District of Florida. In their pleas, Tony and Belkis Marrero admitted that they co-owned two Miami clinics named Medcore Group and M&P Group.

Medcore and M&P purported to specialize in the treatment of HIV-positive patients. The Marreros admitted that beginning in August 2004 and continuing through November 2006 they conspired with others to submit about $5.3 million in fraudulent claims to Medicare. Borrego acknowledged her role in the fraud at Medcore, where she was a phlebotomist who administered unnecessary drugs intravenously to HIV patients.

Tony Marrero also pleaded guilty to two separate conspiracies to launder the proceeds of the health care fraud. Sentencing for all three defendants is scheduled for April 3, 2009.

During their pleas, the defendants admitted that Medcore and M&P were operated for the purpose of defrauding Medicare and that the treatments for infused or injected drugs billed to Medicare were not medically necessary.

Each of the defendants also admitted that all of the patients at the clinics were participants in the fraud. The defendants admitted that they, or their co-conspirators, entered into kickback arrangements with these Medicare beneficiaries whereby the beneficiaries were paid every week in exchange for their Medicare billing information, which allowed the clinics to submit the fraudulent bills.

To obtain all the cash necessary to pay the patients, Tony Marrero admitted that he and others would write checks that appeared legitimate to people who would cash the checks and then return the cash to them for a fee.

The defendants admitted that none of the Medicare beneficiaries needed the injection and infusion treatments billed to Medicare by the clinics. Tony and Belkis Marrero acknowledged that clinic employees intentionally manipulated patients' blood samples so that they would appear to need treatment, when in fact they did not. Belkis Marrero and Borrego also admitted that they put together medical files to make them appear legitimate and that they supported the treatments being billed to Medicare.

Four co-defendants in the case are scheduled for trial beginning Feb. 9 in the Southern District of Florida. An indictment and an information are merely charges, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

The Justice Department reported that it has reached a settlement with the State of Georgia regarding the conditions at Georgia's seven psychiatric hospitals.

The department opened its investigation of Georgia's psychiatric hospitals in 2007 and issued findings regarding Georgia Regional Hospital (Atlanta) on May 30, 2008. The department subsequently entered into negotiations regarding remedies the state was required to implement to correct unconstitutional conditions at all the hospitals.

The other state facilities involved in the settlement include: Georgia Regional Hospital (Savannah), Central State Hospital (Milledgeville), Southwestern State Hospital (Thomasville) East Central State Hospital (Augusta) West Central State Hospital (Columbus) and Northwest Georgia Regional Hospital (Rome).

Under the terms of the settlement agreement, the state will work to ensure that patients at the seven hospitals are safe and receive the care and services necessary to meet their individualized needs.

Specifically, the state has agreed to undertake a variety of measures, including improving medical and mental health care and ensuring that patients are free from undue bodily restraint. The state also will improve discharge planning and ensure that each patient is served in the most integrated setting appropriate.