Medical Device Company Pays Over $550,000 to Resolve False Claims Act Allegations

Tactile Systems Technology, a Minnesota-based medical device company, has agreed to pay $550,959 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare for medically unnecessary pneumatic compression devices. The settlement, announced by the U.S. Attorney’s Office for the District of Massachusetts, resolves claims that certain Tactile sales personnel fabricated or amended medical records to make it appear that Medicare coverage requirements had been met.

Medicare covers pneumatic compression devices which are used to treat chronic swelling from lymphedema and chronic venous insufficiency, but only after a patient has failed to receive adequate relief from four weeks of conservative therapy. According to the government, Tactile sales personnel inserted false statements into medical records about patients’ failure to respond to basic compression therapy, and in some cases forged healthcare professionals’ signatures on doctored documents.

The scheme also involved falsifying records to justify upgrading patients to the more expensive Flexitouch device when the basic Entre model would have sufficed. This case was initiated through two qui tam whistleblower lawsuits filed under the False Claims Act. The whistleblowers will receive approximately $129,475 as their share of the recovery. This recent example reflects the government’s ongoing commitment to holding medical device companies accountable when sales practices prioritize profits over patient care and defraud taxpayer-funded programs like Medicare. The investigation was conducted by the HHS Office of Inspector General, with assistance from the Department of Veterans Affairs and the Defense Criminal Investigative Service.