Evoke Neuroscience, Inc., of New York will pay $225,000, and its co-founder/CEO David Hagedorn, Ph.D., of Jacksonville, North Carolina, will pay $220,000, to resolve alleged False Claims Act violations for causing the submission of false claims to Medicare by promoting false billing codes for a “brain health” device. The settlement was announced today by United States Attorney Jacqueline C. Romero of the Eastern District of Pennsylvania.
Dr. Hagedorn, a psychologist, co-founded Evoke as a startup in approximately 2009. Evoke sold its “eVox” device primarily to general practitioner physicians. The device involves a 20-60 minute in-office application of a helmet with electrodes that purports to test certain brain functions. During Evoke’s initial startup phase, Dr. Hagedorn selected six billing codes for the eVox device.
The settlement resolves allegations that from January 1, 2013 through May 31, 2021, Evoke and Dr. Hagedorn promoted to health care providers six false billing codes for Medicare reimbursement for the eVox device. By promoting false billing codes to health care providers, Evoke and Dr. Hagedorn caused the providers to submit false claims to Medicare. The United States contends that none of the codes were ever appropriate for the eVox device as applied because the codes generally require a longer testing time, a specialized environment (e.g., soundproof/dark room), and can only be administered by a relevant specialist. Moreover, the United States contends that Evoke and Dr. Hagedorn improperly encouraged health care providers to bill multiple codes for a single application of the eVox device. In 2018, coding consultants informed Evoke that many of the billing codes it was promoting were problematic, after which time Evoke stopped promoting the false codes.
“There is no ‘startup’ exception under the False Claims Act,” said U.S. Attorney Romero. “You will be held accountable if you knowingly promote false billing codes to others.”
This settlement resolves claims originally brought by Kevin Vance, M.D., and Angel Vance, R.N., of Madison, Mississippi to whom, among others, Evoke marketed the eVox system. The case was brought under the whistleblower, or qui tam, provisions of the False Claims Act. The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. The Vances will receive $89,000 of the settlement proceeds.
The lawsuit is captioned United States ex rel. Dr. Kevin Vance and Angel Vance v. Evoke Neuroscience, Inc., No. 21-452 (E.D. Pa.). The qui tam suit was initially filed in the United States District Court for the Southern District of Mississippi, and was transferred to the Eastern District of Pennsylvania, where the U.S Attorney’s Office had previously settled a False Claims Act case with a local provider involving, among other things, use of eVox: https://www.justice.gov/usao-edpa/pr/neurosurgeon-medical-practice-director-pay-over-1-million-resolve-false-claims-act.
The case was handled by Assistant United States Attorneys Matthew E. K. Howatt and Joel M. Sweet of the United States Attorney’s Office for the Eastern District of Pennsylvania, along with Auditor Dawn Wiggins and Investigator Jeff Braun, and Assistant United States Attorneys Deidre Colson, Jennifer Case, and Civil Chief Angela Williams of the United States Attorney’s Office for the Southern District of Mississippi. The U.S. Department of Health and Human Services Office of the Inspector General supported the investigation.
The government’s pursuit of this matter illustrates the government’s emphasis on combating health care 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) or online at https://oig.hhs.gov/fraud/report-fraud.
All civil claims are allegations only. There has been no determination of civil liability.