AtriCure bows out of whistleblower suit with nearly $4M payment

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AtriCure, a developer of cardiac surgical ablation systems, has reached a tentative settlement agreement with the Department of Justice (DoJ) in a qui tam case filed in 2007 for $3.8 million plus interest over a five-year period.

Sanford Wittels & Heisler, along with co-counsel Grant Morris, represent the relator in the case against AtriCure, which was filed in the U.S. District Court for the Southern District of Texas.

The complaint charges that AtriCure violated the Federal False Claims Act by using illegal kickbacks and an off-label marketing campaign to induce physicians and hospitals to perform AtriCure's inpatient cardiac surgical ablation procedures over other outpatient catheter ablation procedures, resulting in increased costs to Medicare.

Specifically, the complaint alleges that AtriCure enticed hospitals to purchase its products by promoting the spread between Medicare reimbursement for its surgical ablation procedure and the relatively low cost to the hospital. The West Chester, Ohio-based AtriCure is further accused of providing physicians and hospitals with kickbacks, including free equipment; price discounts; free advertising, marketing and referral services; and extensive training for surgeons performing its procedures.

"This settlement allows us to focus on the remaining three companies under investigation: St. Jude Medical, Boston Scientific and Medtronic," said Grant Morris, co-lead counsel in the AtriCure qui tam case.

“Further, we believe reaching a tentative settlement to bring closure to the ongoing Department of Justice investigation will allow us to focus on the business and executing our strategic priorities, including restoration of growth trends and increased shareholder value,” said David J. Drachman, AtriCure's president and CEO.

The tentative agreement between AtriCure and the DoJ is subject to the completion and approval of a written settlement agreement.

See also: Pfizer completes $2.3B settlement with DoJ over deceptive marketing practices and Merck tips scales in DoJ $1B healthcare fraud recovery efforts in 2008.