Endoscopic Technologies to Pay United States $1.4M to Settle Medicare Fraud Allegations

Endoscopic Technologies Inc. (Estech) 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, according to the Department of Justice.

The settlement resolves allegations that the San Ramon, Calif.-based company marketed its medical devices to treat atrial fibrillation, 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 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.

Endoscopic Technologies was not immediately available for comment.