EndoGastric Settles False Claims For $5.25M; Whistleblower to Get $945K
Washington-based EndoGastric Solutions has agreed to pay the U.S. government up to $5.25 million to resolve allegations that the company violated the False Claims Act and the Anti-Kickback Statute by misleading health care providers in how to bill federal health care programs and paying kickbacks to certain physicians, the Department of Justice announced yesterday.
EndoGastric Solutions manufactures and sells a device called EsophyX that is intended to treat gastroesophageal reflux disease, developed as an alternative to a more invasive procedure that requires incisions in the abdomen. The government alleged that EndoGastric Solutions knowingly caused health care providers to bill for the less invasive EsophyX procedure using codes applicable to the more invasive procedure, which provided for a higher level of reimbursement. As a result, federal health care programs allegedly paid more than they should have for the procedures using EsophyX.
The government also alleged that EndoGastric Solutions knowingly paid illegal remuneration to certain physicians for participating in patient seminars and co-marketing agreements to induce them to use EsophyX, in violation of the Federal Anti-Kickback Statute. The Anti-Kickback Statute prohibits offering or paying remuneration to induce referrals of items or services covered by federally funded health care programs.
EndoGastric Solutions has also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. The agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement.
The lawsuit was originally filed by Glenn Schmasow, a former EndoGastric employee, under the whistleblower provision of the False Claims Act. The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Schmasow will receive up to $945,000 as his portion of the settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.