A Medical Device Daily

The Scooter Store (New Braunfells, Texas) reported yesterday that it will settle a dispute with the U.S. Department of Justice and relinquish its right to collect Medicare reimbursements for certain power wheelchairs and scooters, which the company says were properly delivered to qualified Medicare beneficiaries.

The settlement includes a $4 million cash payment to the government, $500,000 of which will come directly from Dough Harrison, company founder and CEO. Harrison also will not collect dividends for his shares in the company over the next year.

"I made this concession so we could reach this settlement with the government," Harrison said. "We want to get back to focusing on helping seniors and people with disabilities increase their freedom and independence with power mobility."

Harrison also said that the government dropped its countersuit "and is no longer pursuing unsubstantiated allegations about our business practices."

The Scooter Store filed a lawsuit four years ago seeking payment of Medicare reimbursements that had been denied by the government, even though it had determined, it said, that the claims met the eligibility criteria for the Medicare mobility benefit. In a counter-suit, the government fought to continue denying the claims.

Harrison said that an "unstated policy" of the government "is to limit costs to the Medicare program and do whatever it can to curtail access to power wheelchairs and scooters. Our company got caught in the middle. We did nothing wrong."

Harrison said that while the government will not pay for the claims relinquished in the settlement, The Scooter Store stands by its "Guaranteed Freedom Program" and that Medicare beneficiaries can keep their power wheelchairs and scooters at no cost.

In other legalities:

• Biovail (Toronto) reported that it has received a "Wells Notice" from the U.S. Securities and Exchange Commission alleging violations of federal securities laws.

It said that the notice relates to the SEC's investigation of the company's accounting and disclosure practices for FY03 and certain transactions associated with an entity it acquired in 2002.

The issues include the company's recognition of revenue and expenses for accounting in its financial statements in certain periods, related disclosures and possible misleading disclosures concerning its forecast of a revenue shortfall for the three-month period ending Sept. 30, 2003.

The company has the opportunity to respond in writing to the notice before a formal recommendation regarding any action brought by the commission. Biovail said it is cooperating with the SEC in this matter.

Biovail develops pharmaceutical products using advanced drug-delivery technologies.

• CoreValve (Irvine, California) said it has been informed of recent legal action by Edwards Lifesciences (Irvine) in the German courts.

CoreValve said it believes the lawsuit is without merit and the company intends to vigorously defend against it and maintain its right to continue to develop its ReValving System for the less-invasive treatment of aortic valve disease. It said that its policy is to make no specific public comments concerning pending legislation.

CoreValve is developing a delivery system and tissue heart valve for percutaneous heart valve replacement, intended to avoid open-heart surgery.

• Greta Carolus, a former nurse and citizen of Loveland, Colorado, has filed a lawsuit in U.S. District Court for the District of Colorado against General Electric (Fairfield, Connecticut), GE Healthcare (Waukesha, Wisconsin), and GE Healthcare Bio-Sciences, claiming that their imaging agent, Omniscan, caused a debilitating skin and joint disease known as Nephrogenic Systemic Fibrosis (NSF).

The suit seeks damages for 15 separate causes of action and her attorney says it may be the first against GE stemming from the effects of Omniscan, also known as gadodiamide. Omniscan is injected into patients prior to MRI or MR angiograms (MRA) to help distinguish blood vessels from nearby tissues.

Peter Burg, a partner with Burg Simpson Eldredge Hersh & Jardine (Denver), said that a few days after she was injected with Omniscan, Carolus developed symptoms associated with NSF/NFD, formally diagnosed in November 2005, and progressing to widespread fibrosis and edema in her arms, legs, and "associated joints." He said the disease "has caused permanent effects … and could lead to death."

Carolus, wheelchair-bound, was forced to leave her employment as a nurse as a result of her injuries.

Last year, the FDA acknowledged that there were 200 reports worldwide of NSF sometimes called Nephrogenic Fibrosing Dermopathy (NFD), the law firm said, adding that in 2006 that FDA issued Public Health Advisory alerts about the development of serious, sometimes fatal, NSF/NFD following patient exposure to several contrast agents, including Omniscan.

The suit claims that GE was aware, or should have been aware, of the risks of Omniscan and that there were reprots demonstrating NSF/NFD in connection with the use of gadodiamide contrast agents, including Omniscan.