California Medical Device Company to Pay $7.62 Million to Resolve Allegations that Its Subsidiary Billed TRICARE for Excessive, Unnecessary Supplies
The Department of Justice announced today 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. (Empi), 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.
The settlement resolves allegations that Empi used inappropriate techniques such as “assumptive selling” to persuade some TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes from 2010 through 2015, with a particularly steep increase in the number of beneficiaries receiving unnecessary quantities in 2014-2015. Assumptive selling consisted of Empi sales representatives contacting some TRICARE beneficiaries and inducing them to order excessive TENS electrodes by acting as though the beneficiaries had indicated a need for them, when that may not have been the case.
DJO announced its decision to shut down Empi in November 2015, and Empi ceased operations the following month.
“We commend the Defense Health Agency and the Department of Defense Office of Inspector General for analyzing this conduct and working with the Department to guard the integrity of TRICARE, a vital federal health care program that provides medical care and services to those in the military and their families,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.
“Service members, veterans, and their families deserve the best available medical care,” said United States Attorney Gregory G. Brooker. “This $7.6 million settlement underscores our commitment to protecting the integrity of federal health care programs and it sends a strong message of accountability to those who would seek to take advantage of those programs.”
“This settlement demonstrates the commitment of the Defense Criminal Investigative Service (DCIS), along with our law enforcement partners, to aggressively pursue the waste, fraud, and abuse of Department of Defense and TRICARE resources,” said Special Agent in Charge Michael Mentavlos of the DCIS Southwest Field Office.
The settlement is the most recent in the federal government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act, under which this matter was resolved. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
This matter 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 claims settled by this agreement are allegations only; there has been no determination of liability.