KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Medicare Fraud Taints California Device Maker And New Jersey Clinic

A California device maker settles a Medicare fraud case while a New Jersey doctor and his office manager are accused in a Medicare fraud scheme.

The Wall Street Journal / Dow Jones reports: "Endoscopic Technologies Inc., a privately held medical-device manufacturer, will pay $1.4 million to settle Medicare fraud claims related to surgical ablation devices used in heart surgery, the U.S. Department of Justice said Tuesday. U.S. officials alleged the San Ramon, Calif., company paid kickbacks to health-care providers that used its ablation devices and advised them on how to seek inflated Medicare payments for procedures using the devices. In addition, the Justice Department said the company, known as Estech, promoted surgeries using ablation devices when less-invasive procedures would have been appropriate and that it marketed the devices to treat abnormal heart rhythm, a use unapproved by the U.S. Food and Drug Administration" (Burns, 7/14).

The Oakland Tribune reports on the same case: "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. ... 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" (Richman, 7/14).

In a separate case, The Star-Ledger reports on a New Jersey doctor accused of fraud at the Center for Lymphatic Disorders in Egg Harbor Township: "An Atlantic County surgeon and his office manager have been charged with defrauding Medicaid, Medicare and private insurance companies out of more than $8.5 million, state officials announced yesterday. Khashayar Salartash, 42, of Linwood and his office manager, Farah Iranipour Houtan, 51, of Egg Harbor Township, allegedly conducted the fraud between August 2002 and June 2007 while working at Salartash's treatment center, The Center for Lymphatic Disorders LLC. State officials said Salartash and Houtan fraudulently received $593,363 from Medicaid, $4.7 million from Medicare and $3.3 million from private carriers after improperly billing for services."

The paper notes: "The eight-count indictment, issued Monday by a state grand jury, includes charges of conspiracy, health care claims fraud, Medicaid fraud and misconduct by a corporate official. State officials said the defendants claimed Salartash had personally provided or supervised medical services, when in fact they were separately performed by a therapist or nurse. They also allegedly billed for surgery when only therapy services were provided" (Megerian, 7/15).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.