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Whistleblower suits target fraud by ablation companies

By Phillips & Cohen LLP

Endoscopic Technologies Inc. (Estech), a medical device manufacturer, will pay the federal government $1.4 million to resolve a whistleblower suit alleging violations of the False Claims Act, the U.S. Dept. of Justice announced.

The suit claimed that Estech promoted its surgical ablation devices for treatment of atrial fibrillation, a use that is not approved by the U.S. Food and Drug Administration (FDA). The government also alleged that the company promoted expensive heart surgeries using the company?s devices, advised hospitals to up-code surgical procedures, and paid kickbacks to healthcare providers to use its devices.

The suit was filed in the Southern District of Texas, which has unsealed four additional qui tam lawsuits against other surgical ablation device manufacturers.

One of those companies is AtriCure Inc., which said in an SEC filing that it had received a copy of the qui tam complaint. The company says that the relator is a former employee of one of the other medical device companies.

Other companies named, according to the Wall St. Journal, include Medtronic, St. Jude and Boston Scientific, all of whom say they are cooperating with federal authorities.

Full post as published by False Claims Act - Qui Tam on July 20, 2009 (boomark / email).