Medical Device Company Will Pay up to $14.25 million to Resolve Allegations of Violating the FCA

The DOJ announced that Diopsys Inc., a medical device company based in Middletown, Pennsylvania, has  agreed to pay up to $14.25 million to resolve allegations of violating the Federal False Claims Act and various state laws. 

According to the government, Diopsys knowingly submitted or caused others to submit false claims to Medicare and Medicaid for vision testing services. The allegations center around Diopsys’ NOVA device, which was cleared by the FDA for visual evoked potential (VEP) testing. But the company allegedly promoted its use for electroretinography (ERG) vision testing—a substantially different procedure for which the device lacked FDA clearance. And according to the government,  Diopsys made significant modifications to the NOVA device without seeking the necessary FDA approval.

This matter was initiated pursuant to the qui tam provisions of the False Claims Act by a California  ophthalmologist, Dr. Atul Jain. Per the settlement, based on the company’s financial condition, Diopsys will make guaranteed payments of $1.225 million and contingent payments of up to $13.025 million. And the whistleblower will receive over $200,000. Upon announcing this settlement, U.S. Attorney John Giordano for the District of New Jersey stated that “[t]oday’s resolution reaffirms our commitment to protect the integrity of the Medicare and Medicaid programs [and] [h]ealth care companies must not encourage doctors to submit claims for payment for medically unnecessary tests.”

The attorneys at Chilivis Grubman also represent clients of all types and sizes in connection to False Claims Act investigations and litigation.  If you need assistance with such a matter, please contact us today.