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DOJ settles medical device whistleblower case for $33.2M

Fraudulent billing practices to directly increase products often seem to be the focus of healthcare fraud lawsuits. However, as a recent settlement under the False Claims Act (FCA) highlights, healthcare fraud issues may be somewhat more indirect. A former quality control analyst for a medical device manufacturer noted defects in a device that ultimately cost taxpayers money, according to the Department of Justice.

Defective diagnostic testing devices were often used in emergency rooms

The point-of-care medical testing devices were marketed to healthcare facilities to help doctors diagnose a range of serious medical conditions, ranging from coronary issues and heart disease, to drug overdoses. Emergency room personnel relied on the devices to make prompt decisions in the emergency room setting.

Unfortunately, the medical device manufacturer had received complaints the units were susceptible to providing false negatives and false positives. The unreliable results allegedly misled doctors in making diagnostic decisions. The recent whistleblower lawsuit alleged that the manufacturer knew of the defect, but did nothing to correct the problem, while continuing to market the faulty device.

The whistleblower will receive roughly $5.6 million for her efforts

Hospitals and other healthcare facilities submitted claims to Medicare, Medicaid and other government healthcare programs for reimbursement related to the unreliable testing. The quality control analyst filed a lawsuit on behalf of the government under the FCA to hold the device manufacturer accountable for healthcare fraud. The company and a subsidiary have agreed to settle the lawsuit for $33.2 million. The quality control analyst is expected to receive roughly $5.6 million for bring the evidence forward and filing the lawsuit.

In announcing the settlement, Chad A. Readlerm, an Acting Assistant Attorney General for the DOJ noted that the government will hold medical device manufacturers accountable if they knowingly sell defective products that waste taxpayer dollars and adversely impact patient care." Often healthcare fraud issues are difficult for government officials to detect. The FCA allows private individuals to file a lawsuit on behalf of the government. Whistleblowers are rewarded with a percentage of the proceeds recovered through verdict or settlement.

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