Baltimore, Maryland – Medical device manufacturer Paradigm Spine has agreed to pay the United States $585,000 to resolve allegations under the False Claims Act that the company caused health care providers to submit false claims to Medicare and other federal health care programs for spine surgeries by marketing the company’s coflex-F® device for surgical uses that were not approved by the U.S. Food and Drug Administration (FDA). The settlement further resolves allegations that Paradigm caused false claims by giving false recommendations on how to code health claims for procedures involving the company’s coflex® device.
The settlement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Drew Grimm, Office of Personnel Management, Office of Inspector General.
“A medical device manufacturer has a duty to be truthful about the approved uses of medical devices and the appropriate billing codes to use when seeking payment from the government,” said U.S. Attorney Rod J. Rosenstein.
According to the settlement agreement, from 2011 to 2013, Paradigm Spine allegedly marketed coflex-F for surgical uses that were not approved by the FDA. Further, from 2012 to 2015, Paradigm Spine allegedly provided health care providers with improper guidance on how to claim reimbursement for coflex. As a result of this conduct, the United States claimed that Paradigm Spine caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement. Paradigm denies the allegations.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Chris Coyle, a former Paradigm Spine sales representative (United States ex rel. Charles Coyle v. Paradigm Spine, LLC, et al., Case No. DKC-14-CV-2086 (D. Md.)). The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. As part of today’s resolution, Mr. Coyle will receive approximately $105,300. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The settlement was the result of an investigation the U.S. Attorney’s Office for the District of Maryland, U.S. Department of Justice, the Department of Health and Human Services’ OIG, the Department of Defense’s OIG and the Office of Personnel Management’s OIG, with assistance from the FDA’s Office of Chief Counsel and Office of Criminal Investigations. The case was handled by Assistant U.S. Attorneys Thomas Barnard and Rebecca Koch, and Trial Attorney Lisa Samuels from the Department of Justice.