Medical Device Company TranS1 Will Pay $6 Million to Settle False Claims Act Charges

July 22, 2013 — Whistleblowers play a crucial role in the government’s fight against health care fraud. The False Claims Act’s qui tam provisions authorize insiders to file a lawsuit on behalf of the government and to receive a portion in any recovery. Insiders, like health care company employees, are often in the best position to be informants for the government about health care fraud.

TranS1 Encourage Physicians to Submit False Claims Related to Spine Surgeries

TranS1 Inc., now called Baxano Surgical Inc., will pay $6 million to settle allegations that the company induced physicians to use its AxiaLIF System through illegal payments, according to the Justice Department. The AxiaLIF System is used in minimally invasive spine surgeries.

The government alleged that TranS1 knowingly counseled health care providers to submit false claims to government programs with incorrect diagnosis or procedure codes so that minimally invasive spine fusion surgeries that used TranS1’s AxiaLIF System were billed as more invasive spine fusion surgeries. As a result, providers overbilled and received improper reimbursement.

The government also alleged that TranS1 knowingly made illegal payments to physicians for taking part in speaker programs and meetings meant to induce them to use the company’s products.

The government further alleged that TranS1 promoted its AxiaLIF System for uses not approved by the U.S. Food and Drug Administration, such as use in some procedures to treat complex spine deformity. Because the AxiaLIF System was not approved by the FDA for these purposes, it was also not covered by federal health care programs for those uses.

The allegations that gave rise to this settlement were the subject of a whistleblower lawsuit. The whistleblower who filed that suit will receive more than $1 million from the settlement.

Insiders Are Allies in Fight Against Health Care Fraud

Informants and tipsters who collaborate with federal authorities are critical allies in the fight against rampant Medicare fraud. However, whistleblowers need to understand their rights before they contact authorities. The Medicare fraud lawyers with Waters & Kraus provide skilled counsel to whistleblowers every day. Contact us by email or phone our False Claims Act attorneys at 855.784.0268 to learn more about the process and how we can help.

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