Boston Scientific, Medtronic, five others slapped with off-label lawsuits

July 15, 2009 by MassDevice staff

The two device giants and five other companies are accused of promoting the off-label use of microwave cardiac ablation products and of bilking the Medicare system in a federal whistleblower lawsuit.

Boston Scientific Corp.'s notorious acquisition of Guidant Corp. is causing even more headaches for the Natick-based devices giant, now that a federal "qui tam" whistleblower lawsuit accuses the pair (and five other medical device makers including Medtronic Inc.) of promoting the off-label use of microwave cardiac ablation and potentially bilking millions from the Medicare system.

The lawsuit accuses the two device giants, plus AtriCure Inc., St. Jude Medical Inc. and subsidiary Epicor Medical Inc. and Endoscopic Technologies of offering illegal kickbacks and free equipment to perform microwave cardiac ablation procedures not approved by the Food & Drug Administration.

The suit alleges that Guidant (both before and after its April 2006 acquisition by BSC) initiated a scheme to encourage hospitals to improperly bill Medicare for the procedures and to "upcode" their bills to get even more out of the federal health program.

The whistleblower, whose request that all personal information be redacted from court documents was granted, worked for Boston Scientific as a sales rep. According to court documents, she's put in 16 years in the medical device industry and was a top 10 sales producer for a previous employer.

During her training to sell Guidant's Flex 10 ablation system, she was allegedly told to "market the spread" — that is, highlight the difference between what Medicare pays for cardiac ablations (an average $30,289) and the low cost of the Flex 10 procedure (an average $10,650). That $20,000 "spread" is pure profit for the hospitals.

The scheme allegedly called for sales reps to coach hospitals to bill Medicare using codes for open-heart procedures, rather than the minimally invasive technique actually used, to bilk the system out of an extra $20,000 per procedure.