Diopsys, Inc., a medical device manufacturer in Middletown, Pennsylvania, has agreed to a settlement of up to $14.25 million to address allegations of violating the federal False Claims Act and various state laws. The allegations state that Diopsys knowingly submitted or caused the submission of false claims to Medicare and Medicaid concerning vision testing services related to their NOVA device. This information was disclosed by U.S. Attorney John Giordano.
The controversy involves the use of Diopsys' NOVA device, which was cleared by the FDA for visual evoked potential (VEP) testing. The United States alleged that from January 1, 2015, through December 31, 2021, health care providers were urged to submit claims for medically unnecessary uses, such as electroretinography (ERG) vision testing, for which the NOVA device was not cleared. Furthermore, it is alleged that Diopsys made significant modifications to the NOVA device without seeking FDA clearance or approval.
“Today’s resolution reaffirms our commitment to protect the integrity of the Medicare and Medicaid programs. Health care companies must not encourage doctors to submit claims for payment for medically unnecessary tests,” stated U.S. Attorney John Giordano.
As per the settlement, Diopsys is liable to make guaranteed payments amounting to $1,225,000, with contingent payments potentially reaching $13,025,000, accounting for the company's financial situation. The civil settlement also resolves claims filed under the whistleblower provisions by Dr. Atul Jain, a California-based ophthalmologist. Through these provisions, private parties can file lawsuits on behalf of the United States and receive a portion of the recovery. Dr. Jain is set to receive a minimum of approximately $207,000 from the federal recovery.
The settlement was brought about by a joint effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Office for the District of New Jersey. The U.S. Department of Health and Human Services Office of Inspector General also contributed to the effort.
The investigation highlighted the government's ongoing dedication to tackling health care fraud, with the False Claims Act serving as a significant tool in this endeavor. The government encourages reporting potential fraud, waste, and abuse to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The resolution was managed by Assistant U.S. Attorney David Simunovich and Trial Attorney Daniel Meyler. The case is documented as United States ex rel. Jain v. Diopsys, Inc., et al., Civil Action No. 21-18151 (D.N.J.).
It is crucial to note that the settlement resolves allegations, and there has been no liability determination.
Counsel for Diopsys, Inc. is Paul Fishman of Newark, NJ, while Justin Berger, Esq., of San Mateo, CA, represents Dr. Atul Jain.