Latham, New York-based medical device manufacturer AngioDynamics, Inc. has agreed to pay the United States a total of $12.5 million to resolve allegations that the company caused healthcare providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK), the Justice Department announced this week.   

AngioDynamics will pay $11.5 million to resolve allegations that the company caused false claims to be submitted to government healthcare programs for procedures involving an unapproved drug-delivery device that was marketed with false and misleading promotional claims..  The government alleged that, from May 2006 through December 2011, AngioDynamics served as the U.S. distributor for Biocompatibles plc, the manufacturer of LC Bead, and marketed LC Bead for use as a drug-delivery device in combination with chemotherapy drugs.  Moreover, AngioDynamics personnel routinely claimed that this particular use of LC Bead, which FDA had twice declined to approve, was “better”, “superior”, “safer” and “less toxic” than alternative treatments, even though there was insufficient clinical evidence to support the truthfulness of these claims.  The government also alleged that AngioDynamics was aware that many insurers declined to provide coverage for certain LC Bead procedures and, as a result, instructed healthcare providers to use inaccurate billing codes when submitting claims for such uses.  The federal share of the civil settlement is approximately $10.9 million, and the state Medicaid share of the civil settlement is approximately $600,000.  The government previously resolved related criminal and civil claims against Biocompatibles in November 2016.      

AngioDynamics will separately pay $1 million to resolve allegations that the company caused false claims to be submitted to federal healthcare programs in connection with the use of the PVAK, later renamed the 400 micron kit.  In 2008, AngioDynamics acquired the PVAK as part of a product suite that utilizes a laser to close or collapse malfunctioning veins.  The PVAK was FDA-cleared only for use in treating superficial veins, and, in 2011, AngioDynamics requested that the FDA clearance include the treatment of perforator veins.  However, FDA informed the company that the treatment of perforator veins constitutes a new indication for which safety and efficacy were unknown.  As a result, AngioDynamics voluntarily recalled the PVAK and re-issued the product under a new name, the 400 micron kit that did not refer to the unapproved use of treating perforator veins.  Notwithstanding the recall and rebranding, certain AngioDynamics personnel, as part of a continued campaign to market the device to treat perforator veins, falsely represented to providers that Medicare would cover this use despite Medicare coverage restrictions to the contrary.     

The civil settlement relating to LC Bead resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Mr. Ryan Bliss, who formerly worked in the marketing departments of both AngioDynamics and Biocompatibles.  The Act permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed in the Western District of Texas and is captioned United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al., Case No. SA-13-CA-0667-XR.  As part of today’s resolution, Mr. Bliss will receive approximately $2.3 million from the settlement relating to LC Bead.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

The Justice Department announced that Healogics, Inc. has agreed to pay up to $22.51 million to settle allegations that it violated the False Claims Act by knowingly causing wound care centers to bill Medicare for medically unnecessary and unreasonable hyperbaric oxygen (“HBO”) therapy.  Healogics, a Florida-based company, manages nearly 700 hospital-based wound care centers across the country.

Medicare covers HBO therapy, a modality in which the entire body is exposed to oxygen under increased atmospheric pressure, as an adjunctive therapy to treat certain chronic wounds.  The settlement announced today resolves allegations that Healogics knowingly submitted or caused the submission of false claims to Medicare for medically unnecessary or unreasonable HBO therapy.

Under the settlement, Healogics has agreed to pay $17.5 million, plus an additional $5.01 million if certain financial contingencies occur within the next five years, for a total potential payment of up to $22.51 million. 

In addition to resolving its False Claims Act liability, Healogics has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General which includes, among other things, a claims review and a systems review – both to be conducted by an Independent Review Organization. 

The allegations resolved by this settlement arose from a lawsuit filed by James Wilcox, a former Director for Research and Quality for Medical Affairs at Healogics, and a separate lawsuit filed by Dr. Benjamin Van Raalte, Dr. Michael Cascio, and John Murtaugh, two doctors and a former program director who worked at Healogics-affiliated wound care centers.  The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery.  The settlement provides for a whistleblower share of up to $4,276,900.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

Massachusetts-based medical device manufacturer Alere Inc. and its subsidiary Alere San Diego (Alere) have agreed to pay the United States $33.2 million to resolve allegations that Alere caused hospitals to submit false claims to Medicare, Medicaid, and other federal healthcare programs by knowingly selling materially unreliable point-of-care diagnostic testing devices, the Justice Department announced.

The United States alleged that Alere knowingly sold materially unreliable rapid point-of-care testing devices marketed under the trade name Triage®.  The Triage® devices aided in the diagnosis of acute coronary syndromes, heart failure, drug overdose, and other serious conditions, and the devices were frequently used in emergency departments where timely decisions are critical to ensuring proper patient care.  According to the government’s allegations, Alere received customer complaints that put it on notice that certain devices it sold produced erroneous results that had the potential to create false positives and false negatives that adversely affected clinical decision-making.  Nonetheless, the company failed to take appropriate corrective actions until FDA inspections prompted a nationwide product recall in 2012.  Of the $33.2 million to be paid by Alere, $28,378,893 will be returned to the federal government and a total of $4,860,779 will be returned to individual states, which jointly funded claims for Triage devices submitted to state Medicaid programs. 

The settlement with Alere resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The civil lawsuit was filed by Amanda Wu, who formerly worked for Alere as a senior quality control analyst.  As part of today’s resolution, Ms. Wu will receive approximately $5.6 million.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

UPMC Hamot (Hamot), a hospital based in Erie, Pennsylvania – and now affiliated with the University of Pittsburgh Medical Center (UPMC) – and Medicor Associates Inc. (Medicor), a regional physician cardiology practice, have agreed to pay the government $20,750,000 to settle a False Claims Act lawsuit alleging that they knowingly submitted claims to the Medicare and Medicaid programs that violated the Anti‑Kickback Statute and the Physician Self‑Referral Law, the Justice Department announced this week.  Hamot became affiliated with UPMC after the conduct resolved by the settlement occurred.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper compensation arrangement.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

The settlement resolves allegations brought in a whistleblower action filed under the False Claims Act alleging that Hamot paid Medicor up to $2 million per year under twelve physician and administrative services arrangements which were created to secure Medicor patient referrals.  Hamot allegedly had no legitimate need for the services contracted for, and in some instances the services either were duplicative or were not performed.

The lawsuit was filed by Dr. Tullio Emanuele, who worked for Medicor from 2001 to 2005, under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to share in any recovery.  The Act also allows the government to take over the case or, as in this case, the whistleblower to pursue it.  In a March 15, 2017 ruling, the U.S. District Court for the Western District of Pennsylvania held that two of Hamot’s arrangements with Medicor violated the Stark Law.  The case was set for trial when the United States helped to facilitate the settlement.  Dr. Emanuele will receive $6,017,500.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.

The Department of Justice announced that Hyperion Foundation, a Georgia not-for-profit entity (Hyperion), Julie Mittleider, a resident of Georgia and Hyperion’s former President, AltaCare Corporation, a Georgia corporation engaged in nursing home management (AltaCare), Douglas Mittleider, AltaCare’s Chief Executive Officer, and related companies, Long Term Care Services Inc. and Sentry Healthcare Acquirors Inc., have agreed to pay the United States a total of $1.25 million to resolve allegations of false claims to Medicare and the Mississippi Medicaid program for providing grossly substandard care to residents at the Oxford Health and Rehabilitation nursing home in Lumberton, Mississippi, from late 2005 through mid-2012, when it was operated by AltaCare, under a contract with Hyperion.

The government alleged that Hyperion made claims to Medicare and Medicaid for providing effectively worthless services to residents at the Lumberton, Mississippi facility, while the facility was managed by AltaCare.  For example, the United States alleged that Hyperion failed to meet the nutritional needs of residents, failed to administer medications to residents as prescribed by their physicians, overmedicated residents, hired insufficient staff to care for them, and diverted Medicare and Medicaid funds to other entities affiliated with Douglas or Julie Mittleider, leaving the facility unable to pay for its basic operations, including food, heat, air conditioning, pest control, and cleaning.  These failures, the United States alleged, caused the facility’s residents to suffer pressure ulcers, falls, dehydration, and malnutrition, among other physical, mental and emotional harms.  As a result, Hyperion allegedly submitted false claims for grossly substandard care, and Douglas Mittleider, AltaCare and certain related companies allegedly caused such false claims.

The settlement resolves allegations filed in a lawsuit by Academy Health Center Inc., the owner and landlord of the Lumberton, Mississippi skilled nursing facility.  The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the government for the submission of false claims and share in any recovery.  The False Claims Act authorizes the United States to intervene and take over primary responsibility for the action, as it did in this case.  The amount to be recovered by the private whistleblower has not been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.