Vascular Solutions to Pay $520,000 to Settle False Claims Act Allegations

In a recent False Claims Act settlement, Minneapolis-based Vascular Solutions, Inc. (“VSI”) has agreed to pay $520,000 to the federal government in order to settle claims it unlawfully marketed its products for the treatment of varicose veins. The company, which has admitted no liability or guilt in the matter, agreed to the settlement following the 2010 filing of a qui tam whistleblower lawsuit by a former VSI sales representative.

Following the employee’s filing, the U.S. Department of Justice opted to intervene, allowing for an investigation into the matter by the Defense Health Agency, the Office of Personnel Management, and the Department of Health and Human Services.

Details of United States ex rel. DeSalle Bui v. Vascular Solutions, Inc.

To better understand the fraud allegedly perpetrated by VSI, it may help to understand the nature of its products, particularly its “Vari-Lase Short Kit.” In general, VSI is in business to create products designed for the treatment of varicose veins. Varicose veins occur as a result of twisted, swollen, or engorged veins that appear purple and often occur in the legs and ankles. While this condition is not usually life-threatening, the presence of varicose veins can suggest a larger underlying problem known as deep-vein thrombosis – which is a blockage in deeper veins beneath the skin. Therefore, for patients wishing to alleviate their varicose veins for non-cosmetic reasons, these claims may be reimbursable by federal healthcare programs.

VSI’s Vari-Lase Short Kit is marketed for the treatment of varicose veins and uses laser technology to “seal off” the veins – a process known as endovenous laser ablation. VSI markets several kits for the treatment of this condition; however, its Short Kit was approved for the treatment of veins that were shorter in length. The Short Kit was also only approved for the treatment of surface, or superficial, veins that appeared close to the skin. It was not approved for the treatment of deeper veins, known as “perforator veins.” VSI repeatedly attempted to gain approval from the FDA to market its Vari-Lase Short Kit for the treatment of deeper veins, but its clinical testing revealed its failure to meet “safety and efficacy benchmarks.”

According to the allegations, VSI proceeded to market its Short Kit for the treatment of perforator veins nonetheless. This off-label marketing tactic resulted in the submission of thousands of claims by physicians seeking reimbursement from Medicare and Medicaid for Vari-Lase Short Kits used in patients needing treatment for perforator vein issues.

Government’s Response

In an effort to maintain its momentum against the widespread and extensive healthcare fraud occurring in the United States, the Department of Health and Human Services reiterated its dedication to the prosecution of this type of misconduct: “Medical device manufacturers that ignore rules designed to protect patients in order to boost profits will be held accountable for their actions….We will continue to work with the Department of Justice to root out all forms of waste, fraud, and abuse in our federal healthcare programs.”

The Department of Justice did not disclose the amount the relator is set to receive for his involvement in exposing VSI’s fraudulent marketing of its Vari-Lase Short Kit. However, the False Claims Act permits plaintiffs to recover up to 25 percent in qui tam cases wherein the government opted to intervene. If you are aware of similar healthcare fraud and would like to speak to a reputable whistleblower attorney, contact Berger Montague today.