New York Medical Device Manufacturer Pays Justice Department $12.5 Million To Settle False Medicare And Medicade Claims Allegations

A New York state medical device manufacturer has agreed to pay the federal government $12.5 million to settle claims made against it that it led medical providers to make false claims to Medicare, Medicaid, and other state-based health care programs.

The Justice Department says AngioDynamics, Inc. led health care providers to make the erroneous claims in connection with the use of two medical devices marketed by the firm, namely LC Bead and the Perforator Vein Ablation Kit (PVAK).

From the spring of 2006 to the winter of 2011, AngioDynamics allegedly marketed the LC Bead as a drug-delivery device for chemotherapy, claiming the device was in many ways superior to all other available delivery systems. In reality, clinical data failed to support any such claims, leading the Food and Drug Administration to twice decline to approve for use in the U.S.

Many insurance firms were aware of the device’s shortcomings and chose not to provide coverage for its use. Investigators say that, when AngioDynamics became aware of this, they counseled providers to file claims under unrelated codes that were more likely to be approved by insurers.

Separately, AngioDynamics allegedly marketed the PVAK, which was approved by the FDA to use for the repair of damaged superficial veins only, under a different name for use in the repair of perforator veins in an effort at masking the fact that such a use was not approved by the FDA. The new name, the 400 micron kit, was allegedly affixed to the PVAK, and it was re-marketed with no indication of the product’s approved use on the label. Furthermore, AngioDynamics personnel are alleged to mislead providers by saying that Medicare would reimburse for the product’s unapproved use.

Both complaints were brought to the Justice Department under the qui tam (whistleblower) provision of the False Claims Act (a/k/a the “Lincoln Law”), and, upon further investigation by the Department, was ultimately taken up by the Department and prosecuted in federal court.

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