Vascular Solutions Inc. (VSI) has agreed to pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing a medical device for the ablation (or sealing) of perforator veins without FDA approval and despite the failure of its own clinical trial, the Justice Department announced today.  VSI is a medical device company based in Minneapolis, Minnesota.

“The FDA approval process and clinical studies serve an important role in ensuring that federal health care participants receive devices that are medically appropriate and necessary,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “We will not permit companies to circumvent that process and put profits over patient safety.”

VSI markets and sells medical devices that treat varicose veins by sealing the veins with laser energy (endovenous laser ablation).  Their products include consoles, which generate the laser energy, and accessory kits.  Kits include needles to access the veins, laser fibers that carry the laser energy, and sheaths that guide the laser fiber to the area to be ablated and protect the parts of veins not being ablated.  In particular, VSI marketed and sold the “Vari-Lase Short Kit” medical device.  The kit contained a sheath that was shorter than other kits, which made it easier to treat vein segments that were shorter in length.

VSI’s “Short Kit” was approved only for the treatment of surface or superficial veins in the leg, which run near the surface of the body, and not for perforator veins, which connect the surface veins to deeper veins in the leg muscle.  The government alleged that VSI knowingly promoted the “Short Kit” for the ablation of perforator veins even though VSI had attempted to and failed to get FDA marketing clearance for ablation of this particular type of vein, and VSI had conducted a clinical trial of the “Short Kit” for ablating perforator veins that failed to meet both safety and efficacy benchmarks.  As a result of this conduct, the government alleged that VSI knowingly caused physicians and other purchasers of the “Short Kit” to submit false claims to federal health care programs for uses of the “Short Kit” that were not reimbursable. 

“The settlement announced today should make it clear that the Department of Justice will pursue companies that knowingly promote medical devices for unapproved uses, causing federal health care programs to pay for services that cannot be reimbursed,” said U.S. Attorney Robert Pitman for the Western District of Texas.

“Medical device manufacturers that ignore rules designed to protect patients in order to boost profits will be held accountable for their actions,” said Special Agent in Charge Mike Fields for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Dallas region.  “We will continue to work with the Department of Justice to root out all forms of waste, fraud, and abuse in our federal health care programs.”

The allegations resolved by today’s settlement were raised in a lawsuit filed against VSI by DeSalle Bui, a former sales representative at VSI, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery.  Mr. Bui’s share of the settlement has not been determined.

The case was handled by the Commercial Litigation Branch of the Justice Department’s Civil Division, and the U.S. Attorney’s Office for the Western District of Texas.  Assistance was provided by the Defense Health Agency, the Office of Personnel Management, and the HHS-OIG and Office of General Counsel. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $20.2 billion through False Claims Act cases, with more than $14 billion of that amount recovered in cases involving fraud against federal health care programs.

The claims settled by this agreement are allegations only, and there has been no determination of liability.  The lawsuit is captioned United States ex rel. DeSalle Bui v. Vascular Solutions, Inc., No. A10CA883-SS (W.D. Tex.).