THD America Settles Medicare/Medicaid Fraud Case for $700K

Medical device manufacturer THD America Inc. and its corporate parent, THD SpA of Italy, are paying $700,000 to resolve allegations that it violated the False Claims Act by allegedly filing inflated Medicare and Medicaid reimbursement claims.

Specifically, the Natick, Mass.-based firm is accused of encouraging doctors to use incorrect codes to bill the U.S. government for use of its hemorrhoid removal system, the Slide One Kit. The unlawful activity reportedly occurred between 2014 and 2017.

“Accurately billing for services provided to Medicare and Medicaid enrollees is required of all health care companies,” said Special Agent in Charge Maureen Dixon of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “HHS-OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate allegations of companies violating the federal False Claims Act.”
 
According to the settlement agreement, the Kit was sold to physicians for use in transanal hemorrhoidal dearterialization, a surgical procedure that involves cauterizing certain blood vessels. The federal government claims that physicians performing procedures using the Kit were required to bill for the procedure using a temporary code, also known as a “T-Code,” assigned for new and emerging services. Because a procedure that is assigned such a code is considered experimental, reimbursement for the Kit was often denied. To avoid such denials and increase potential reimbursement, THD allegedly worked with colorectal and general surgeons to bill Medicare and Medicaid programs using the T-Code plus an additional Current Procedural Terminology (CPT) code or to bill for CPT codes other than the T-code.
 
The federal share of the civil settlement is $598,121.23, and the state Medicaid share of the civil settlement is $101,877.77. State Medicaid programs are jointly funded by the federal and state governments.
 
“The integrity of federal healthcare programs depends upon compliance with coding and billing rules that are used to make coverage and reimbursement decisions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the U.S. Justice Department’s Civil Division. “We will hold accountable health care providers that knowingly submit false claims to federal health care programs that do not accurately reflect and bill for the work they perform.”
 
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by former THD America employee Amber Arthur. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The relator’s share from the proceeds of the settlement will be $115,500. The qui tam action is captioned U.S. ex rel. Arthur v. THD America, et al. 
 
The resolution in this case result from a coordinated effort between the U.S. Attorney’s Office for the District of Maryland and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG.
 
Assistant U.S. Attorney Tarra DeShields for the District of Maryland and Senior Trial Counsel Jay D. Majors of the Justice Department’s Civil Division handled the case.
 
The claims resolved by the settlement are allegations only. There has been no determination of liability.