By: Christopher A. Parrella, Esq., CPC, CHC, CPCO Parrella Health Law, Boston, Ma. A Health Law Defense and Compliance Firm

Medical device manufacturer THD America Inc., based in Natick, Massachusetts, and its parent company THD SpA of Italy have agreed to pay $700,000 to resolve allegations that they violated the False Claims Act (FCA). The allegations stemmed from improper billing practices related to their product, the Slide One Kit, used in the transanal hemorrhoidal de-arterialization (THD) surgical procedure.

The Allegations

The United States government alleged that, between 2014 and 2017, THD encouraged physicians to submit incorrect billing codes to Medicare and state Medicaid programs to inflate reimbursements. The Slide One Kit required physicians to bill using a “T-Code,” designated for experimental procedures. However, this often led to denied reimbursements. According to the allegations, THD advised physicians to use this T-Code in combination with other billing codes or entirely different Current Procedural Terminology (CPT) codes, resulting in inflated reimbursements.

The settlement breaks down into $598,121.23 for the federal government and $101,877.77 for state Medicaid programs, which receive joint funding from federal and state governments.

Legal and Industry Implications

Principal Deputy Assistant Attorney General Brian M. Boynton emphasized the importance of compliance with billing regulations, stating, “We will hold accountable health care providers that knowingly submit false claims to federal health care programs that do not accurately reflect and bill for the work they perform.” This case serves as another reminder of the legal risks associated with improper billing practices, particularly when it comes to government health care programs.

The Role of Whistleblower

The case was brought to light under the qui tam provisions of the FCA by Amber Arthur, a former employee of THD America. Qui tam provisions allow private citizens to file suits on behalf of the U.S. government and share in any recovered funds. For her role in exposing the fraud, Arthur will receive $115,500 from the settlement.

The Bigger Picture

This settlement highlights the critical role that whistleblowers play in uncovering fraud within federal health care programs like Medicare and Medicaid. It also underscores the importance of compliance and accountability for medical device manufacturers and health care providers. As U.S. Attorney Erek L. Barron stated, “This case is emblematic of the U.S. Attorney’s Office’s commitment to pursuing and holding accountable those who seek to defraud federal health care programs and to recouping taxpayer dollars obtained falsely.”

At Parrella Health Law, we’re committed to helping health care providers navigate the complexities of federal billing regulations and avoid costly legal entanglements. If you have questions or need assistance ensuring that your billing practices are compliant with federal health care regulations or you or your company are under investigation for alleged billing non-compliance, contact us today at 857-328-0382 or email Chris directly at cparrella@parrellahealthlaw.com. We’re here to support your organization in maintaining the highest standards of legal and regulatory compliance.