Endoscopic Technologies, Inc. (Estech) will pay $1.4 million to resolve civil claims of alleged promotion of its surgical ablation devices.
According to the Justice Department, the San Ramon, Calif.-based company supposedly marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration.
Surgical ablation devices use focused energy to create controlled lesions or scar tissue on a patient’s heart or other organs.
"The Department of Justice is committed to protecting Medicare from the unlawful marketing practices of Estech and other medical device manufacturers," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
The government also claims that Estech promoted expensive heart surgeries using the company’s devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company’s devices to inflate Medicare reimbursements, and paid kickbacks to healthcare providers to use its devices.
Prosecutors said Estech knowingly violated the Food, Drug and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.
The allegations were made in a lawsuit filed in the U.S. District Court for the Southern District of Texas under the qui tam provisions of the False Claims Act, which permit private citizens, called "relators," to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment. The relator will receive $210,000 as the statutory share of this settlement.
The Southern District of Texas has unsealed four additional qui tam lawsuits filed by relators against other surgical ablation device manufacturers. The government is investigating those cases.
"We will continue to work with our partners at the Department of Health and Human Services Inspector General’s Office and the FDA Office of Chief Counsel to preserve the integrity of our public health programs,” said West.