THD America Pay $700,000 to Resolve False Claims Act Violation Allegations

THD America and its corporate parent, THD SpA of Italy, recently agreed to pay $700,000 to resolve allegations from the US Attorney’s Office, District of Maryland, that the company violated the False Claims Act by “knowingly causing physicians to use incorrect codes to obtain inflated reimbursement from Medicare and state Medicaid programs,” for the use of its Slide One Kit hemorrhoid removal system, according to the Department of Justice (DOJ).

The system was sold to healthcare providers for use in transanal hemorrhoid dearterialization — a surgical procedure that involves cauterizing certain blood vessels — and was required to be billed using a temporary code, also known as a T-Code, which is assigned to new and emerging services. However, as the procedure is considered experimental, reimbursement for its use was often denied by insurance.

In order to circumvent denials and increase potential reimbursement, the US alleged that, between 2014 and 2017, THD encouraged colorectal and general surgeons to improperly bill Medicare and Medicaid programs using the T-Code plus an additional CPT code, or bill for CPT codes other than the appropriate T-Code.

“This case is emblematic of the United States Attorney’s Office’s commitment to pursuing and holding accountable those who seek to defraud federal health care programs and to recouping taxpayer dollars obtained falsely,” said Erek L. Barron, United States attorney for the District of Maryland, in the press release announcing the agreement. “We will continue our efforts tirelessly in prioritizing rooting out fraud and protecting the public fisc.”

Of the $700,000 civil settlement, the federal share is $598,121.23 and the state Medicaid share is $101,877.77.

Additionally, the civil settlement included the resolution of claims brought under the qui tam (whistleblower) provisions of the False Claims Act by former employee of THD America, Amber Arthur. Under the whistleblower provisions, “a private party can file an action on behalf of the United States and receive a portion of any recovery,” according to the press release. “The relator’s share from the proceeds of the settlement will be $115,500. The qui tam action is captioned U.S. ex rel. Arthur v. THD America, et al., No. 16-cv-2571 (D. Md.).”

The resolution of the allegations comes as a result of collaboration between the US Attorney’s Office for the District of Maryland and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from the Department of Health and Human Services, Office of Inspector General (DHHS-OIG).

“Accurately billing for services provided to Medicare and Medicaid enrollees is required of all health care companies,” said Maureen Dixon, Special Agent in Charge for the US Department of Health and Human Services, Office of the Inspector General, in the release.  “DHHS-OIG will continue to work with the US Attorney’s Office and our law enforcement partners, to investigate allegations of companies violating the federal False Claims Act.”

Of note, the claims resolved by the settlement are considered allegations only and there has been no determination of liability from THD.