A California company has agreed to pay $7.6 million to the government to resolve allegations that its now-defunct subsidiary submitted false claims to Tricare for electrical nerve stimulation devices that patients didn’t need or use, Justice Department officials announced this week.
According to the announcement, DJO Global Inc. agreed to the settlement regarding allegations targeting its former subsidiary, Minnesota-based Empi Inc., and involving devices that use low-voltage electrical current for pain relief.
Empi allegedly ”used inappropriate techniques such as ‘assumptive selling’ to persuade some Tricare beneficiaries to seek and accept unjustifiably large quantities of these supplies from 2010 to 2015,” the announcement states.
There was a “particularly steep” increase in the number of beneficiaries who received these unneeded devices over the last two years of that time frame, officials noted. Empi sales representatives allegedly contacted some Tricare beneficiaries and convinced them to order excessive quantities by acting as though the beneficiaries had indicated the need for them.
DJO Global announced in November 2015 that it was shutting down Empi. The subsidiary closed up shop the following month, according to Justice officials.
Attempts to reach DJO Global officials were unsuccessful.
DJO Global officials noted lower sales of Empi products in a Nov. 10, 2015, news release.
Key officials will lose management positions as part of the agreement. The company denies any wrongdoing.
“As a result of these ongoing challenges and despite our actions to improve this business over the past few years, we do not expect the sales and profitability of Empi’s products to return to acceptable levels and therefore have developed a plan to exit the Empi business over the next several months,” the release stated.
Justice officials stated the claims settled are allegations only, and there has been no determination of liability. The Defense Health Agency and the DoD Office of the Inspector General were involved in analyzing the conduct and worked with investigators.
“Service members, veterans, and their families deserve the best available medical care,” said Gregory G. Brooker, U.S. Attorney for the District of Minnesota. “This $7.6 million settlement underscores our commitment to protecting the integrity of federal health care programs and it sends a strong message of accountability to those who would seek to take advantage of those programs.”