Medical Device Company Zyno Medical LLC Agrees To Pay Nearly $500,000 To Resolve False Claims Act Allegations Relating to Defective Medical Device
Zyno Medical LLC (Zyno), a medical device manufacturer headquartered in Massachusetts, has agreed to pay $493,140 to resolve allegations that it violated the False Claims Act by causing the submission of claims to Medicare in connection with the intravenous (IV) administration of medication using devices Zyno knew were materially defective.
The settlement announced today resolves allegations that Zyno knowingly distributed defective IV administration sets that were used to deliver controlled dosages of chemotherapy and other medications to Medicare beneficiaries. As part of the settlement, Zyno has admitted that it knew as early as Nov. 5, 2015 that certain of its administration sets, sold for use with its Z-800 series of IV infusion pumps, were defective and that the defect caused leaks during the infusion of medication. Zyno has further admitted that it did not institute a recall of the defective administration sets until July 29, 2016 and, in fact, continued to sell additional affected administration sets into commerce for a period of time.
“Medicare patients who need chemotherapy or other medication administered intravenously should not have to worry about whether the devices used for their treatment will deliver the intended dosage,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will pursue appropriate relief when health care providers, including medical device manufacturers, knowingly put the safety and welfare of federal healthcare program beneficiaries at risk.”
“Medical device manufacturers who knowingly sell materially defective products undermine the integrity of federal health care programs,” said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue to work with concerned citizens, the Department of Justice, and our investigative partners to ensure the federal government only pays for honest, high quality health care products and services.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by John Bertucci, a former Territory Manager for Zyno, and Lowell Warner, Zyno’s former Vice President of Sales. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Bertucci, et al. v. Zyno Medical LLC, et al., No. 20-cv-10388-WGY (D. Mass.). As part of today’s resolution, the whistleblowers will receive approximately $100,000.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the Department of Health and Human Services, Office of Inspector General and the FBI Boston Field Office.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. 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).
The matter was handled by Trial Attorney Joanna G. Persio of the Civil Division and Assistant U.S. Attorney Charles B. Weinograd of the District of Massachusetts.
The claims resolved by the settlement are allegations only and there has been no determination of liability.