Endoscopic Technologies to Pay U.S. $1.4 Million to Resolve Allegations of Medicare...

Endoscopic Technologies to Pay U.S. $1.4 Million to Resolve Allegations of
Medicare Fraud

WASHINGTON, July 14 /PRNewswire-USNewswire/ -- Endoscopic Technologies Inc.
(Estech), a medical device manufacturer, has agreed to pay the United States
$1.4 million to resolve civil claims in connection with the alleged promotion
of its surgical ablation devices, the Justice Department announced today.
Surgical ablation devices use focused energy to create controlled lesions or
scar tissue on a patient's heart or other organs.

The settlement resolves allegations that the San Ramon, Calif.-based company
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 (FDA). The government also alleged 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.
The United States asserted that by engaging in this conduct, 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 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. "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."

The allegations were made against Estech 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 a total of
$210,000 as the statutory share of the settlement.

The Southern District of Texas has also unsealed four additional qui tam
lawsuits filed by relators against other surgical ablation device
manufacturers. The United States continues to investigate those cases.

The settlement with Estech was the result of a coordinated effort by the U.S.
Attorney's Office for the Southern District of Texas, the Civil Division of
the Department of Justice, the Department of Health and Human Services' Office
of Inspector General, and the FDA Office of Chief Counsel.

SOURCE U.S. Department of Justice

U.S. Department of Justice, +1-202-514-2007, +1-202-514-1888 (TDD)