Redmond, Wash.-based EndoGastric Solutions will pay up to $5.25 million to settle allegations that it violated the False Claims Act by inappropriately advising healthcare providers when billing federal healthcare programs for a procedure using one of the company's devices, according to a Department of Justice news release.
The company's EsophyX device treats gastroesophageal reflux disease. It is used in procedures less invasive than those requiring abdominal incisions.
EndoGastric Solutions allegedly misled healthcare providers to bill the government for the more invasive, and thereby more expensive, procedures when less invasive procedures were performed using the EsophyX device.
Additionally, the government alleges EndoGastric Solutions paid kickbacks to physicians for participating in seminars and marketing agreements encouraging physicians to use the EsophyX device.
Glen Schmasow, a former employee of EndoGastric Solutions, filed the qui tam lawsuit.
"A medical device manufacturer violates the law when it advises physicians and hospitals to report the wrong codes to federal health insurance programs in order to increase reimbursement rates," said U.S. Attorney for the District of Montana Michael Cotter in the news release.
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