Atrium Medical Corp. Settles False Claims Act Allegations for $11.5 Million

In March 2013, Esther Grace Sullivan, a sales representative and territory business manager at Atrium Medical Corp. (“Atrium” or the “Company”), alleged that the Company was paying doctors to use its iCast stents for unapproved uses, a violation of the False Claims Act (“FCA”). Medical stents are used to stop arteries from re-closing and Atrium’s stents were approved to treat tracheobronchial obstructions, but doctors have used them for other vascular system purposes. The FCA claims against Atrium involved providing doctors dinners, giving them grants, and offering other kickbacks in order to incentivize them to use Atrium’s medical stents. Although the government is typically involved in FCA cases, since these cases involve defrauding the government and cheating it out of large sums of money, the government was not interested in being part of the lawsuit. Nonetheless, the Plaintiff moved forward with her claims.

Sullivan claimed all of the iCast stents sold by the Company, totaling $382 million in sales, were utilized for unapproved uses. She alleged government healthcare programs and services, such as Medicare, Medicaid, and the U.S. Department of Veterans Affairs paid for close to 70 percent of the stents.

Atrium admitted no wrongdoing and said the decision to use the stents is the responsibility of the doctors, made on a case-by-case basis for the benefit of the patient. In order to resolve the lawsuit, the Company settled for $11.5 million, which was one of the largest FCA settlements in which the government didn’t intervene. According to the Company, it plans to begin working on new technology that will improve the lives and health of all patients, so it can move forward and demonstrate how the Company works to help people.

Source: Kass, Dani. “Medical Device Co. To Pay $11.5M Over Alleged Kickbacks.” Law360. Portfolio Media, Inc. 28 July 2016. Web.