San Ramon firm settles FDA suit for $1.4 million, denies wrongdoing

Posted July 14th, 2009.

As it appeared in The Oakland Tribune

By Josh Richman
Oakland Tribune

A San Ramon-based medical device manufacturer has agreed to pay $1.4 million to settle the government’s contention that it engaged in false marketing, encouraged bogus Medicare claims and paid kickbacks.

Endoscopic Technologies Inc., or Estech, denies the accusations and has not admitted to any wrongdoing in the settlement, Estech’s attorney, Roger Goldman, said.

Estech makes devices for surgical ablation, using focused energy to heat and create scar tissue on the heart or other organs. Estech was accused of marketing its medical devices to treat atrial fibrillation — the most common abnormal heart rhythm — which is not a use approved by the U.S. Food and Drug Administration. Estech also was accused of promoting costly heart surgeries using its devices when less invasive options were appropriate; advising hospitals to classify surgical procedures with the company’s devices to inflate Medicare reimbursements; and paying kickbacks to health-care providers to use its devices.

The government said these actions violated the Food, Drug and Cosmetic Act and led to submission of false and fraudulent claims in violation of the False Claims Act.

Officials at Estech, a privately held company founded in 1996, declined to comment Tuesday.

“The Department of Justice is committed to protecting Medicare from the unlawful marketing practices of Estech and other medical device manufacturers,” Tony West, assistant attorney general for the Justice Department’s Civil Division, said in a news release. “We will continue to work with our partners at the Department of Health and Human Services’ Inspector General’s Office and the FDA Office of Chief Counsel to preserve the integrity of our public health programs.”

The case against Estech was filed in federal court in Texas under the False Claims Act’s “qui tam” provisions, which let private citizens sue on behalf of the United States and receive part of any settlement or judgment.

The filer for this case will get $210,000. Similar lawsuits against other surgical ablation device makers are still pending in Texas.

Reach Josh Richman at 510-208-6428 or jrichman@bayareanewsgroup.com.

Share this News Article

Back to Top