Medical Device Company to Pay $7.62 Million Over False Claims on TRICARE

January 26, 2018

The Department of Justice hailed the False Claims Act (FCA) for proving yet again as a powerful tool in combating health fraud.  Through tips and complaints from all sources, the DOJ is successfully going after potential fraud, waste, abuse, and mismanagement. Last January 23, it concluded a settlement for one of such cases.

The Department of Justice said that DJO Global Inc. (DJO), a medical device company headquartered in Vista, California, has agreed to pay $7.62 million to resolve allegations that its subsidiary, Empi Inc., a now-defunct medical device company based in Shoreview, Minnesota, submitted false claims to TRICARE for excessive, unnecessary transcutaneous electrical nerve stimulation (TENS) electrodes that TRICARE beneficiaries did not need or use.  TENS is a therapy that uses low-voltage electrical current for pain relief.

DJO shut down Empi in November 2015. But before that, from 2010 to 2015, Empi allegedly used “assumptive selling” to persuade the TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes. Its use rose steeply with more beneficiaries receiving unnecessary quantities in 2014 to 2015.

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With this selling technique, the Empi sales representatives contacting TRICARE beneficiaries and prompted them to order excessive TENS electrodes by acting as though the beneficiaries had shown a need for them, when that may not have been the case.

Oftentimes these cases are filed through a whistleblower who stands to receive a whistleblower award for their information.  The whistleblower also known as a relator, files the False Claims Act action which is often referred to as whistleblower or qui tam lawsuits.  Qui Tam law is an interesting area of practice and one in which a plaintiff may not file pro se, that is they need a whistleblower lawyer or qui tam law firm to assist and as a prerequisite to file.  In a case like DJO a whistleblower could received up to 30% and thus a sample qui tam award would be $2.28 million dollars for providing information.

TRICARE is a federal health care program providing medical care and services to those in the military and their families. United States Attorney Gregory G. Brooker said the $7.6 million settlement underscores their commitment to protecting the integrity of federal health care programs and that it sends a strong message of accountability to those who would seek to take advantage of those programs.

The case was handled by the Civil Frauds Unit of the U.S. Attorney’s Office for the District of Minnesota, the Justice Department’s Commercial Litigation Branch, and the Department of Defense Office of the Inspector General. The settlement concluded the case but DJO did not admit liability.