Medical device manufacturer EV3, an owner of the subsidiary Covidien, Inc., has agreed to pay $1.25 million to settle a False Claims Act lawsuit brought about following allegations it intentionally offered fraudulent billing advice to hospitals with regard to the use of its atherectomy products. The case was settled after a lengthy investigation, which was commenced upon the filing of a whistleblower lawsuit by a former sales representative for the company prior to its recent merger. For her troubles, the whistleblower is set to receive 20 percent of the settlement amount, or $250,000.
Details of the case against EV3, f/k/a Fox Hollow Technologies
Among many other products, EV3 and its subsidiary Covidien design and manufacture products for purposes of performing atherectomy procedures, which is the cleaning of plaque buildup in the blood vessels. Using its SilverHawk Plaque Excision System, doctors are able to alleviate some of the dangers of plaque buildup in patients, thereby helping patients avoid the risk of heart attacks and other cardiac episodes. However, unlike more invasive artery-cleaning procedures, removal of plaque buildup in the blood vessels is generally considered to be a minimally invasive outpatient procedure. However, EV3 and Covidien did not treat it as such.
According to the allegations, presenters from EV3 were engaged in the routine practice of advising doctors and hospitals that programs like Medicaid and Medicare would cover the costs of an inpatient atherectomy if the practitioners committed to using the SilverHawk Plaque Excision System, which was an assertion it could not make for the other competitors. Naturally, in an effort to boost revenue and ultimately profits, virtually every SilverHawk atherectomy procedure was billed at the significantly higher inpatient rate, despite the fact that the procedure does not involve the inherent risk, recovery, or post-procedure monitoring of a traditional inpatient procedure. What’s more, EV3 f/k/a Fox Hollow is alleged to have fraudulently exaggerated figures relating to the reimbursement of inpatient atherectomy procedures at an 80 percent success rate, when the actual rates were significantly lower.
In its ongoing commitment to combatting healthcare fraud, the Department of Justice, as well as the Department of Health and Human Services, has remained steadfastly committed to eliminating this costly form of taxpayer abuse. The Department of Health and Human Services said, “Medical device makers that try to boost their profits by causing patients to be admitted for unnecessary and expensive inpatient hospital stays will be held accountable….Both patients and taxpayers deserve to have medical decisions made based on what is medically appropriate.”
Counsel for whistleblowers similarly commented, stating, “In the jargon of Fox Hollow’s sales representatives, many hospitals ‘drank the Kool-Aid’ and admitted all or nearly all of those patients to inpatient status regardless of medical necessity….”
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