California company settles False Claims Act allegations for $7.62 million

by Ben Vernia | January 29th, 2018

On January 23, the Department of Justice announced that Vista, California-based DJO Global, Inc., had agreed to pay $7.62 million to settle allegations that the company submitted claims for medically unnecessary medical equipment to TRICARE, the Department of Defense civilian employee health insurance plan. According to DOJ’s press release:

The Department of Justice announced today that DJO Global Inc. (DJO), a medical device company headquartered in Vista, California, has agreed to pay $7.62 million to resolve allegations that its subsidiary, Empi Inc. (Empi), a now-defunct medical device company based in Shoreview, Minnesota, submitted false claims to TRICARE for excessive, unnecessary transcutaneous electrical nerve stimulation (TENS) electrodes that TRICARE beneficiaries did not need or use.  TENS is a therapy that uses low-voltage electrical current for pain relief.

The settlement resolves allegations that Empi used inappropriate techniques such as “assumptive selling” to persuade some TRICARE beneficiaries to seek and accept unjustifiably large quantities of TENS electrodes from 2010 through 2015, with a particularly steep increase in the number of beneficiaries receiving unnecessary quantities in 2014-2015.  Assumptive selling consisted of Empi sales representatives contacting some TRICARE beneficiaries and inducing them to order excessive TENS electrodes by acting as though the beneficiaries had indicated a need for them, when that may not have been the case.

DJO announced its decision to shut down Empi in November 2015, and Empi ceased operations the following month.

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