Diopsys Inc. Settles Claims for $14.25 Million
Diopsys Inc., a medical device company based in Middletown, Pennsylvania, has reached a settlement to pay up to $14.25 million following allegations of violating the federal False Claims Act and various state laws. These allegations stem from claims that the company knowingly submitted false claims to Medicare and Medicaid for vision testing services.
The allegations specifically concern the use of Diopsys’ NOVA device, which received FDA clearance for visual evoked potential (VEP) testing. However, the government asserted that between January 1, 2015, and December 31, 2021, Diopsys caused healthcare providers to submit false claims for medically unnecessary electroretinography (ERG) tests, for which the NOVA device lacked FDA clearance. Furthermore, it was claimed that Diopsys made significant modifications to the NOVA device without seeking FDA clearance or approval, despite being aware that such procedures were mandatory.
U.S. Attorney John Giordano for the District of New Jersey emphasized the importance of maintaining the integrity of Medicare and Medicaid programs, stating that healthcare entities must not endorse claims for unnecessary procedures.
The settlement includes guaranteed payments of $1,225,000, as well as contingent payments that could reach up to $13,025,000, depending on Diopsys’ financial circumstances. Notably, the settlement also resolves claims filed under the qui tam provisions of the False Claims Act by Dr. Atul Jain, a California ophthalmologist, who will receive a portion of the allocated recovery.
This settlement is a significant step in a broader effort to combat healthcare fraud, showcasing the critical role of the False Claims Act. The investigation reflects ongoing vigilance in identifying and addressing fraudulent activities within the healthcare industry. Individuals with knowledge of potential fraud are encouraged to report concerns to the Department of Health and Human Services.
Through this coordinated effort between the Justice Department and various federal offices, the resolution serves as a reminder of the relentless pursuit of accountability in the healthcare sector.
