Medical device companies play an important role in patient care. They are responsible for developing and providing innovative technologies that enhance the diagnosis, treatment, and management of various health conditions. These companies invest in research and development to create devices that improve the accuracy and efficiency of medical procedures, ultimately leading to better patient outcomes. Those who take part in this niche area of the healthcare market also take on the need to adhere to strict legal standards, particularly the False Claims Act (FCA).
How can medical device companies violate the FCA?
Medical device companies can inadvertently violate the FCA in several ways. Common examples include:
- Kickbacks: Offering or receiving kickbacks to influence the purchase or use of medical devices.
- Off-label marketing: Promoting devices for unapproved use can result in false claims if those uses are billed to government programs.
- Inflated pricing: Charging the government more than the agreed-upon price for devices constitutes a violation.
Each of these actions can lead to significant legal and financial consequences.
What are the potential penalties?
Violating the False Claims Act can result in severe penalties for medical device companies. In a recent example, the government conducted a Civil Investigative Demand (CID) against Semler Scientific. The CID is an investigative tool used to gather information related to allegations of a violation of a federal law, such as the FCA. The CID in this case was related to the corporation’s marketing of a test used to diagnose peripheral artery disease. Semler has stated that it is currently in negotiations with the United States Department of Justice (DOJ) and anticipates a settlement of almost $30 million to resolve the matter.
This example highlights the steep costs that can result from a violation of the FCA. In addition to steep monetary fines, companies also face exclusion from federal programs, severely impacting their business operations. It is important to conduct regular internal audits to better ensure compliance and take any allegations of a violation seriously. A defense strategy tailored to the details of your specific situation can help to mitigate the impact of any allegations of wrongdoing.
Attorney John Rivas is responsible for this communication.