In a recent False Claims Act (“FCA”) decision, the United States District Court for the District of Massachusetts granted summary judgment in favor of medical device manufacturer DJO, Inc., holding that statements to Medicare regarding the length of time a patient needed a medical device were not actionable false statements under the FCA because Medicare pays a flat rate for the patient to purchase the device regardless of how long the patient uses the item.
According to the allegations by the Relator, DJO coached physicians who prescribed bone-growth stimulators manufactured by DJO, to overstate the anticipated treatment length on forms submitted to Medicare. The Court held that, because Medicare pays a flat rate for each purchase regardless of the amount of time a patient needs the device, the anticipated treatment length was “immaterial to Medicare’s decision to pay.” Because the FCA requires falsity to be “material” to the government’s decision to pay (meaning that “it has a natural tendency to influence, or is capable of influencing, the decisionmaking body to which it was addressed,” the Court held that a statement that is incapable of influencing Medicare’s decision to pay for a device cannot violate the FCA.
The case is United States ex rel. Bierman v. Orthofix International, N.V., No. 05-10557, 2016 WL 1553268 (D. Mass. April 11, 2016).
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