Health Care: US Settles Qui Tam Suit

The federal government has settled a qui tam or whistle blower action against a medical device manufacturer. Atricure, Inc., a Ohio based company, will pay $3,760,000 to settle the lawsuit. The action alleged that Atricure engaged in prohibited conduct in the marketing of its surgical ablation devices. Such devices use focused energy to create scar tissue on a patient's organs during surgery.

The suit alleged that Atricure engaged in the following wrongful activities: 1) marketed its devices to treat atrial fibrillation (abnormal heartbeat) knowing that the Food and Drug Administration had not approved the ablation device for such use, 2) promoted numerous heart surgeries using its devices while knowing that less invasive procedures were appropriate, 3) advised hospitals to up-code billings to Medicare that used the devices thus inflating the Medicare costs, and 4) paid kickbacks to health care professionals who used the company's devices. The complaint alleged that Atricure violated the Food, Drug, and Cosmetic Act and caused the submission of false claims to Medicare in violation of the federal False Claims Act.

The False Claims Act allows a private citizen to file a qui tam or whistle blower action on behalf of the United States to recover federal payments made as a result of fraud. The person filing the suit is called a "relator." If the federal government intervenes and brings the suit to a positive conclusion, the relator will receive a portion of the recovery. In the Altricure case the relator received $625,000.

The relator filed suit in the Southern District of Texas, which is the district court where the settlement took place.

For more about the case, please see PR Newswire, February 2, 2010, http://www.prnewswire.com/news-releases/atricure-to-pay-us-376-million-to-resolve-medicare-fraud-allegations-83371027.html.