Medical Device Company to Pay Over $550,000 to Resolve False Claims Act Allegations

BOSTON - Tactile Systems Technology (Tactile) has agreed to pay $550,959 to resolve allegations that it submitted false claims to Medicare seeking reimbursement for medically unnecessary pneumatic compression devices in violation of the federal False Claims Act.

Tactile markets pneumatic compression devices that health care professionals prescribe to treat patients suffering from chronic swelling due to lymphedema and chronic venous insufficiency. Pneumatic compression devices apply rhythmic, sequential pressure to body parts to enhance blood flow, lymphatic flow, reduce swelling and prevent venous thromboembolism. Tactile markets two pneumatic compression devices: a basic model called the Entre and an advanced model called the Flexitouch.

Medicare will cover the cost of a pneumatic compression device only after a lymphedema or chronic venous insufficiency patient fails to receive adequate relief from swelling after four weeks of conservative therapy, including basic compression. A health care professional prescribing a pneumatic compression device for a Medicare patient must document in medical records why basic compression failed to adequately treat a patient's condition. Tactile required sales personnel to collect and retain the patient's medical records.

The government contends that between Jan. 1, 2019 and Dec. 31, 2024, certain Tactile sales personnel fabricated or amended health care professionals' medical records and other clinical documentation that Tactile used to submit claims to Medicare for payment for dispensing the pneumatic compression devices. In particular, various Tactile sales personnel, many of whom Tactile terminated upon learning of the conduct, inserted false statements into the medical records about patients' failures to experience relief through basic compression therapy and/or forged health care professionals' signatures on doctored medical records to make it appear as though the health care professionals had prescribed the Entre or Flexitouch devices. In other instances, Tactile sales personnel fabricated and amended health care professionals' medical records and other clinical documentation to falsely state that patients did not experience a significant reduction in swelling after using the Entre and, therefore, required use of the more expensive Flexitouch device.

The claims against Tactile were brought under the whistleblower or qui tam provision of the False Claims Act. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. The relators will receive $129,475 from the proceeds of the settlement. The lawsuits are captioned United States ex rel. Scarborough, LLC v. Tactile Systems Technology, Inc., No 21-cv-10813 and United States ex rel. Gorham and Gast v. Tactile Systems Technology, Inc., No. 21-cv-11809.

United States Attorney Leah B. Foley and Roberto Coviello, Special Agent in Charge, Health and Human Services-Office of Inspector General made the announcement today. This matter is being handled by Assistant U.S. Attorney Steven Sharobem of the Office's Affirmative Civil Enforcement Unit and Civil Chief Abraham R. George.