In The News

Prominent Medical Device Manufacturer Agrees to Pay More than $33 Million to Resolve Alleged False Claims Act Violations

Health care providers and the manufacturers of medical devices who put patient care at risk remain on notice from the federal government even as last year saw the US bring a record number of violators to justice. This was the case again, when the Justice Department announced last month that Alere, Inc. – a Massachusetts-based medical device company – and Alere San Diego (Alere) have agreed to pay the United States $33.2 million to resolve allegations that the companies submitted false claims to Medicaid, Medicare and other government programs. Moreover, the government accused the companies of knowingly selling unreliable point-of-care diagnostic devices. “The United States is fortunate that innovative healthcare companies regularly develop medical devices that improve patients’ lives, often in remarkable ways,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “But the Department will hold medical device manufacturers accountable if they knowingly sell defective products that waste taxpayer dollars and adversely impact patient care.”

Specifically, the government alleged that between 2006 and 2012, Alere knowingly sold faulty point-of-care testing devices under the brand name Triage®. The devices were designed to aid in the diagnosis of acute coronary syndromes, heart failure, drug overdosing and other serious conditions. The devices were often used in ER departments to aid doctors in making timely medical decisions. The government says that it put Alere on notice after it received complains about the device’s erroneous results. Often the devices produced false negatives and positives, etc. Despite warnings from the government, Alere is alleged to have failed to take the proper corrective actions regarding their devices until the FDA prompted a recall of Triage® in 2012. Of the more than $33 million Alere has agreed to pay, $28,378,893 will be returned to the federal government and a total of $4,860,779 will be returned to individual states. (Several states jointly funded claims for Triage® devices submitted to state Medicaid programs.)

“Congress passed the False Claims Act on March 2, 1863 to protect taxpayer dollars from fraud and abuse and to allow private citizens to join the effort,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General in Philadelphia. “We will continue to work with concerned citizens, the Department of Justice and our investigative partners to ensure the federal government only pays for honest, high quality, health care products and services.”

The Alere settlement sprang from a whistleblower action that was filed by a former senior quality control analyst at the company – Amanda Wu. The whistleblower or qui tam provisions of the False Claims Act permits private parties to sue on behalf of the federal government with or without a qui tam lawyer and to receive a share of any recover. A whistleblower law firm handles cases involving plaintiffs who have reported alleged False Claims Act violations. As part of the Alere settlement in this case, Ms. Wu will receive approximately $5.6 million.