U.S. Settles FCA Case Against Medical Device Manufacturer for $1.25 Million

The Department of Justice announced today that Medical device manufacturer ev3 Inc., formerly known as Fox Hollow Technologies Inc., has agreed to pay the United States $1.25 million to resolve allegations under the False Claims Act that Fox Hollow caused certain hospitals to submit false claims to Medicare for unnecessary inpatient admissions related to minimally-invasive atherectomy procedures. 

“Today’s settlement demonstrates our commitment to ensure that the Medicare Trust Fund is used to pay for only necessary medical care,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Charging the government for higher-cost inpatient services that patients do not need wastes the country’s precious health care resources.”

The United States alleged that Fox Hollow, which was acquired by ev3 Inc. in late 2007, knowingly caused 12 hospitals located throughout nine states to submit claims to Medicare for medically unnecessary inpatient stays for certain Medicare beneficiaries undergoing elective atherectomy procedures. Atherectomy is a minimally-invasive surgical procedure that uses a small cutting device to remove atherosclerosis, or hardening of the arteries, from large blood vessels within the body, and it is intended to open up narrowed coronary arteries to increase blood flow and circulation. One such device used in atherectomy procedures is the Silver Hawk Plaque Excision System sold by Fox Hollow. The United States alleged that throughout 2006 and 2007, to increase hospital purchases of the Silver Hawk device, Fox Hollow advised hospitals that they should bill Silver Hawk atherectomy procedures as more expensive inpatient claims, as opposed to less costly outpatient claims. As a result, certain hospitals allegedly claimed greater reimbursement than they were entitled to for treating Medicare beneficiaries who underwent Silver Hawk atherectomy procedures.

This case arose under the qui tam provisions of the False Claims Act which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The lawsuit was filed by a whistleblower who formerly worked as a Fox Hollow sales representative. The whistleblower will receive $250,000.

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