Device manufacturer’s misrepresentations result in $12.5M FCA settlement

Medical device manufacturer AngioDynamics, Inc., settled with the United States for $12.5 million following allegations that the company caused health care providers to submit false claims related to the use of the LC Bead® and the Perforator Vein Ablation Kit® (PVAK) to Medicare, Medicaid, and other federal health care programs. The government alleged that the manufacturer both provided instructions to use inaccurate billing codes and misrepresented Medicare billing policy related to the devices. The settlement came as a result of a suit filed under the whistleblower provision of the False Claims Act (FCA) (31 U.S.C. § 3729).

LC Bead allegations

The medical device manufacturer will pay $11.5 million—$10.9 million paid to the federal government and $600,000 paid to state Medicaid programs—to resolve allegations that the company caused the submission of false claims for procedures involving an unapproved drug delivery device marketed with false and misleading promotional claims. The government alleged that between 2006 and 2011, AngioDynamics served as the distributor for the manufacturer of the LC Bead and marketed the product for use as a drug delivery device in combination with chemotherapy drugs. Employees of the manufacturer routinely claimed that this use of the LC Bead was “better,” “superior,” “safer,” and “less toxic” than alternative treatment, despite lack of clinical evidence to support the statements and despite the FDA’s repeated declination to approve the product. Knowing that many insurers did not provide coverage for certain LC Bead procedures, the company instructed health care providers to use inaccurate billing codes for claims related to these uses.

PVAK allegations

AngioDynamics will also pay $1 million to resolve allegations that the company caused the submission of false claims in connection with the use of PVAK, used to close or collapse malfunctioning veins and which was approved by the FDA only for use in treating superficial veins and not for perforator veins. The manufacturer voluntarily recalled the PVAK and reissued the product under the name “the 400 micron kit.” Despite the recall and rebranding, certain AngioDynamics employees took part in a continued campaign to market the device to treat perforator veins, falsely representing to providers that Medicare would cover this use