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Atricure Inc., a medical device manufacturer, has agreed to pay the United States $3.76 million to resolve civil claims in connection with the alleged promotion of its surgical ablation devices, the Justice Department announced today. Surgical ablation devices use focused energy to create controlled lesions or scar tissue on a patient's heart or other organs.

The settlement resolves allegations that the West Chester, Ohio-based company marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration (FDA). Atricure also allegedly promoted expensive heart surgery using the company's devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company's devices to inflate Medicare reimbursement, and paid kickbacks to health care providers to use its devices. The United States asserted that by engaging in this conduct, Atricure knowingly violated the Food, Drug, and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.

"This settlement reflects our commitment to enforce the Food, Drug, and Cosmetic Act and protect Medicare from the improper marketing practices of Atricure and other medical device manufacturers," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will continue to work with our partners at the Department of Health and Human Services Inspector General's Office and the FDA Office of Chief Counsel to preserve the integrity of our public health programs."

The allegations were made against Atricure in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens, called "relators," to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment. The relator will receive a total of $625,000 as the statutory share of the current settlement.

"The misuse of medical devices has the potential of exposing patients to dangerous procedures and taxpayers to payment of unwarranted claims against Medicare," said Tim Johnson, United States Attorney for the Southern District of Texas. "This settlement demonstrates the government's commitment to maintaining safe and affordable health care for its citizens."

Assistant Attorney General West noted that the settlement with Atricure resulted from a coordinated effort by the Justice Department's Civil Division, the U.S. Attorney's Office for the Southern District of Texas, the Department of Health and Human Services' Office of Inspector General, and the FDA Office of Chief Counsel.

This settlement is part of the government's emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

SOURCE U.S. Department of Justice

Wheaton Community Hospital, the City of Wheaton, Minn. and Dr. Stanley Gallagher (collectively WCH) have agreed to pay $846,461 to settle allegations that their hospital admission practices violated the False Claims Act, the Justice Department announced today.

This settlement resolves allegations that WCH knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions. Specifically, the government contended that, from 1998 to 2004, WCH admitted some patients and kept others admitted to acute care when doing so was not medically necessary. The defendants then billed Medicare for the cost of these hospital admissions.

"Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care. When they neglect those obligations, patients and taxpayers suffer," said Tony West, Assistant Attorney General for the Justice Department's Civil Division.

The allegations against WCH arose from a lawsuit filed in federal court in Minnesota under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private individuals to file civil actions on behalf of the United States and share in any recovery. Dr. Steven Radjenovich, the whisteblower in this case, formerly practiced at Wheaton Community Hospital with Dr. Gallagher. Dr. Radjenovich will receive $203,150 as his share of the settlement with WCH.

Assistant Attorney General West thanked the Justice Department's Civil Division, the U.S. Attorney's Office for the District of Minnesota and the Department of Health and Human Services' Office of the Inspector General for their efforts in handling this investigation and settlement.