U.S. federal enforcement of the False Claims Act (FCA) violations tends to produce some outsized penalties, but the department isn’t shy about slapping six-figure fines on the smaller inhabitants of the med-tech space. DOJ reported that Schwenksville, Pa.-based Jet Medical Inc. and two affiliated companies will pay more than $745,000 to settle claims that Jet had introduced a nerve block device into interstate commerce without the FDA’s approval, a move that often draws the attention of federal government authorities other than the FDA.
The U.S. False Claims Act (FCA) provides one of the more potent legal weapons in the federal government’s enforcement arsenal and three companies felt the sting of the FCA in the closing weeks of December 2022. Advanced Bionics LLC fell under the sway of the FCA related to allegations that it misused a performance standard in its premarket filing for cochlear implants, while Biotelemetry Inc. and its Cardionet LLC subsidiary will fork over more than $44 million for improper claims filed with the Medicare program.
The U.S. Department of Justice (DOJ) reported that it has arrived at a settlement of $45 million with Boca Raton, Fla.-based Modernizing Medicine Inc., an electronic health record (EHR) vendor that was accused of inducing referrals to a clinical lab for pathology services. The department stated that this settlement was the fourth such action against EHR vendors and is part of a concerted DOJ effort to “root out fraud” in the field, a signal that more enforcement against these companies is in the works.
Device makers often need the assistance of physicians to aid in device design and development, but this is a practice that comes with some legal hazards. A session held here in Boston on enforcement in the U.S. made clear that manufacturers must exercise caution in these consulting arrangements, such as documenting the need for outside help with the device, lest the manufacturer end up with a hefty, multimillion-dollar fine imposed by U.S. enforcement agencies.
The litigation over the fraud perpetrated by Theranos Inc. and its executives is still legally relevant, but another Silicon Valley company and its founder have been indicted over misrepresentations to investors over liquid biopsy technologies that were purported to work with just a few drops of blood. A jury recently convicted Mark Schena, the president of Palo Alto-Calif.-based Arrayit Corp., of defrauding investors and causing false claims to be submitted to federal health programs, another example of how investors can be easily misled by hucksters plying the diagnostics trade.
The COVID-19 pandemic encouraged a lot of things, including shoddy product quality, but a recent FDA warning letter suggests that the associated need for tests also encouraged a few operations that had less than a full commitment to quality management.
The U.S. Department of Justice (DOJ) reported that Biotronik Inc., of Lake Oswego, Ore., agreed to pay $12.95 million to settle allegations that the company induced cardiologists to use the company’s devices to treat their patients. Among the allegations is that the company paid for physicians’ holiday parties and winery tours that could not be tied to a legitimate business expense.
The U.S. Department of Justice has been intensely focused on illicit billings to federal government agencies, so much so that the agency reclaimed more than $500 million in the first half of calendar year 2022 under the False Claims Act. However, 80% of that amount came from companies in the life sciences, a fact which combines with pending federal and state legislation to amplify the risk for these companies in the coming years, according to a new report by the law firm of Gibson Dunn & Crutcher, LLP.
The U.S. federal government’s crackdown on companies in the health care space shows no signs of slowing down as indicated by an announcement by the Department of Justice (DOJ) that it has achieved a settlement with Opko Health Inc. and Bioreference Health LLC regarding allegations of induced referrals.
Reliance Medical Systems LLC agreed to pay $1 million to address allegations of violation of the Anti-Kickback Statute (AKS), but the company has responded to that outcome with a blistering riposte.
