A Medical Device Daily

Pediatrix Medical Group (Fort Lauderdale, Florida) reported that it has reached an agreement in principle to pay $25.1 million in a settlement with the U.S. Department of Justice for a previously reported national Medicaid and Tricare investigation.

The settlement relates to services provided from January 1996 through December 1999, and Pediatrix said that the payment would conclude all pending investigations of the company's billing for neonatal services.

Claims for the period 2000 to 2002 were reviewed as part of the investigation and Pediatrix said it is not making any payments for these periods.

Pediatrix reported operating income of $50 million for 4Q05, up 25% from $40.2 million for the comparable 2004 period, when adjusted to exclude the charge to increase its Medicaid-investigation reserves and equity-based compensation.

CEO Roger Medel, MD, called the agreement with the government "an important step forward in resolving these coding and billing issues. Throughout this period, we have remained focused on executing our core strategy. Our 2005 financial results reflect the strength of our business model and our ability to attract and retain physicians to our national group practice."

Pediatrix said it expects cash flow from operations to exceed $170 million during 2006, excluding any payments that may be made in connection with a final settlement of the national Medicaid and Tricare investigation.

Pediatrix is a provider of newborn, maternal fetal and pediatric subspecialty physician services.

In other legalities, Cantel Medical (Little Falls, New Jersey) reported that on Jan. 27 the U.S. District Court for the District of Minnesota granted the motion for summary judgment by Minntech (Minneapolis) in an antitrust lawsuit commenced by HDC Medical (Simpsonville, Kentucky) in November 2003.

With the ruling, the complaint against Minntech, a Cantel subsidiary, has been dismissed. HDC has a 30-day right to appeal the decision.

James Reilly, president and CEO of Cantel, said, "We could not have had a better result. We pride ourselves on the manner in which we conduct our business and the court's ruling clearly confirms that HDC's allegations were without merit."

Cantel is a provider of infection prevention and control products, ranging from specialized medical device reprocessing systems for renal dialysis and endoscopy to hollow fiber membrane filtration and separation products and specialty packaging for infectious and biological specimens. It also sells scientific instrumentation.