September 28, 2020

Volume X, Number 272

September 28, 2020

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The Sale of Unapproved Medical Devices at Center of $3.3M U.S. False Claims Act Settlement

A Federal investigation into alleged false healthcare claims found evidence that New York-based CareFusion Corporation bought and sold “medical devices that were not approved or cleared by the FDA.” CareFusion has agreed to pay the government $3.3 Million after a United States District Attorney for the Southern District of New York announced that the distributor committed civil fraud by violating the False Claims Act.

Medical providers are eligible for federal reimbursement for some of their treatments and services. However, claims made by CareFusion about its medical devices were found to be fraudulent because the medical devices were not approved and uncleared by the FDA. Officials allege False Claims Act violations because the company misrepresented its devices as legal when they were unapproved—allowing other medical providers to seek fraudulent reimbursement claims from Medicare.

Unscrupulous healthcare companies have found many different ways to take advantage of vital government programs like Medicare. The False Claims Act is an essential weapon in the fight against government programs fraud since it was first enacted during the Civil War to combat war profiteering. The system often depends on healthcare whistleblowers telling their story with the help of an experienced False Claims Act attorney.

These private citizens bring qui tam (whistleblower) lawsuits under the False Claims Act (“FCA”), which allows them to act on behalf of the U.S. government in exposing government programs fraud committed by healthcare companies similar to CareFusion. Under the FCA, relators (fraud whistleblowers) receive a portion of the money that has been recovered by the government, known as the relator’s share.

Director Jeffrey E. Shuren, M.D. said: “Americans rely on FDA oversight to ensure that their medical devices are safe and effective.  When companies sell devices without proper authorization, they may be putting patients’ health at risk.  We will continue to investigate and bring to justice companies that attempt to subvert the regulatory functions of the FDA, which are intended to protect the public health.  We commend the efforts of the Department of Justice for their vigorous pursuit of justice in this matter.”

© 2020 by Tycko & Zavareei LLPNational Law Review, Volume IX, Number 151


About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...