02.16.15
Fox Hollow Technologies Inc., which was purchased by Ev3 Inc. nearly eight years ago for $780 million, has agreed to pay the United States $1.25 million to resolve allegations under the False Claims Act that Fox Hollow caused certain hospitals to submit false claims to Medicare for unnecessary inpatient admissions related to minimally invasive atherectomy procedures, according to the U.S. Department of Justice (DOJ).
Minneapolis, Minn.-based Ev3 was purchased by Covidien plc in 2010 for $2.6 billion. Medtronic plc, through its $49.9 billion purchase of Covidien, now owns Ev3 … and inherits the Fox Hollow bill. Though the settlement was announcement this month, the deal to settle the suit was finalized in December, just before the Covidien-Medtronic deal closed.
“Medtronic is committed to the highest standards of ethical conduct, and we take responsibility for delivering outstanding results to our partners, patients and colleagues,” according to a company statement. “The case relates to historical conduct that took place under Fox Hollow. We are pleased to have the matter resolved.”
“Today’s settlement demonstrates our commitment to ensure that the Medicare Trust Fund is used to pay for only necessary medical care,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Charging the government for higher-cost inpatient services that patients do not need wastes the country’s precious healthcare resources.”
The claims resolved by this settlement are allegations only and there has been no determination of liability, according to DOJ officials.
“It should come as no surprise to anyone that proper healthcare of a patient includes more than just competence of a provider, it requires accuracy and honesty in billing Medicare for the patient’s treatment,” said U.S. Attorney William J. Hochul Jr. of the Western District of New York. “In this case, a medical device manufacturer allegedly induced hospitals to admit patients as inpatients for minimally-invasive procedures involving its device, even though many of those patients should have been treated as outpatients at significantly less cost.
This was done in order to collect higher Medicare reimbursements which ultimately drive up costs for all taxpayers and beneficiaries of government health programs.”
The United States alleged that Fox Hollow knowingly caused 12 hospitals located throughout nine states to submit claims to Medicare for medically unnecessary inpatient stays for certain Medicare beneficiaries undergoing elective atherectomy procedures.
Atherectomy is a minimally invasive surgical procedure that uses a small cutting device to remove atherosclerosis, or hardening of the arteries, from large blood vessels within the body, and it is intended to open up narrowed coronary arteries to increase blood flow and circulation.
One such device used in atherectomy procedures is the Silver Hawk Plaque Excision System originally developed and sold by Fox Hollow. The Silver Hawk system is now sold by Medtronic.
The DOJ alleged that throughout 2006 and 2007, to increase hospital purchases of the Silver Hawk device, Fox Hollow advised hospitals that they should bill Silver Hawk atherectomy procedures as more expensive inpatient claims, as opposed to less costly outpatient claims. As a result, certain hospitals allegedly claimed greater reimbursement than they were entitled to for treating Medicare beneficiaries who underwent Silver Hawk atherectomy procedures.
“Medical device makers that try to boost their profits by causing patients to be admitted for unnecessary and expensive inpatient hospital stays will be held accountable,” said Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services, Office of Inspector General. “Patients and taxpayers deserve to have medical decisions made based on what is medically appropriate.”
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The lawsuit was filed by Amanda Cashi, who formerly worked as a Fox Hollow sales representative. Cashi will receive $250,000.
This settlement was part of the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in 2009 by the U.S. attorney general and the secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal healthcare programs.
Medtronic is based in Dublin, Ireland.
Minneapolis, Minn.-based Ev3 was purchased by Covidien plc in 2010 for $2.6 billion. Medtronic plc, through its $49.9 billion purchase of Covidien, now owns Ev3 … and inherits the Fox Hollow bill. Though the settlement was announcement this month, the deal to settle the suit was finalized in December, just before the Covidien-Medtronic deal closed.
“Medtronic is committed to the highest standards of ethical conduct, and we take responsibility for delivering outstanding results to our partners, patients and colleagues,” according to a company statement. “The case relates to historical conduct that took place under Fox Hollow. We are pleased to have the matter resolved.”
“Today’s settlement demonstrates our commitment to ensure that the Medicare Trust Fund is used to pay for only necessary medical care,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “Charging the government for higher-cost inpatient services that patients do not need wastes the country’s precious healthcare resources.”
The claims resolved by this settlement are allegations only and there has been no determination of liability, according to DOJ officials.
“It should come as no surprise to anyone that proper healthcare of a patient includes more than just competence of a provider, it requires accuracy and honesty in billing Medicare for the patient’s treatment,” said U.S. Attorney William J. Hochul Jr. of the Western District of New York. “In this case, a medical device manufacturer allegedly induced hospitals to admit patients as inpatients for minimally-invasive procedures involving its device, even though many of those patients should have been treated as outpatients at significantly less cost.
This was done in order to collect higher Medicare reimbursements which ultimately drive up costs for all taxpayers and beneficiaries of government health programs.”
The United States alleged that Fox Hollow knowingly caused 12 hospitals located throughout nine states to submit claims to Medicare for medically unnecessary inpatient stays for certain Medicare beneficiaries undergoing elective atherectomy procedures.
Atherectomy is a minimally invasive surgical procedure that uses a small cutting device to remove atherosclerosis, or hardening of the arteries, from large blood vessels within the body, and it is intended to open up narrowed coronary arteries to increase blood flow and circulation.
One such device used in atherectomy procedures is the Silver Hawk Plaque Excision System originally developed and sold by Fox Hollow. The Silver Hawk system is now sold by Medtronic.
The DOJ alleged that throughout 2006 and 2007, to increase hospital purchases of the Silver Hawk device, Fox Hollow advised hospitals that they should bill Silver Hawk atherectomy procedures as more expensive inpatient claims, as opposed to less costly outpatient claims. As a result, certain hospitals allegedly claimed greater reimbursement than they were entitled to for treating Medicare beneficiaries who underwent Silver Hawk atherectomy procedures.
“Medical device makers that try to boost their profits by causing patients to be admitted for unnecessary and expensive inpatient hospital stays will be held accountable,” said Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services, Office of Inspector General. “Patients and taxpayers deserve to have medical decisions made based on what is medically appropriate.”
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The lawsuit was filed by Amanda Cashi, who formerly worked as a Fox Hollow sales representative. Cashi will receive $250,000.
This settlement was part of the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in 2009 by the U.S. attorney general and the secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal healthcare programs.
Medtronic is based in Dublin, Ireland.