Atrium Medical Corp. has agreed to pay $11.5 million to settle a False Claims Act (FCA) lawsuit in a Texas federal court. It was alleged that the medical device company paid physicians kickbacks in exchange for promoting unapproved uses of medical stents. Esther Grace Sullivan, who worked as a sales representative and territory business manager from 2007 through 2012, accused Atrium in March 2013 of promoting its iCast for use in the vascular system when it had only been approved to treat tracheobronchial obstructions. The federal government in March 2014 declined to intervene in the qui tam suit.
New Hampshire-based Atrium held dinners and provided financial grants, among other alleged kickbacks, to persuade physicians to use the stents in the vascular systems of elderly patients and then billed Medicare for the procedures. Between 2007 and 2012, Atrium sold about $382 million in iCast stents. According to the whistleblower, 100 percent of those were for unapproved uses, and Medicare, Medicaid, military hospitals and the U.S. Department of Veterans Affairs paid for 70 percent of them. The majority of the settlement money will go back to the government. This is one of the largest settlements reached under the FCA for a medical device company in which the government didn’t intervene.
Ms. Sullivan is represented by Chris Hamilton, Meagan Martin and Kevin Colquitt of Standly Hamilton LLP, Loren Jacobson, Charles S. Siegel and Caitlyn E. Silhan of Waters & Kraus LLP, Michael A. Kornbluth of Taibi Kornbluth Law Group PA, and Jeffrey A. Newman of The Law Offices of Jeffrey A. Newman. The case is United States of America ex rel. Esther Sullivan, Relator et al. v. Atrium Medical Corp. et al. in the U.S. District Court for the Western District of Texas.