Natick Medical Device Company Owes $700K For False Claims Act Violations

NATICK, MA — A Natick-based medical device manufacturer will pay $700,000 after federal officials found they violated the False Claims Act.

Medical device manufacturer THD America, Inc., located in Natick, and its corporate parent, THD SpA of Italy (collectively, THD), have agreed to the payment to resolve allegations that THD "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 THD’s hemorrhoid removal system called the Slide One Kit (the Kit)," the United States Attorney's Office in Maryland said.

The Kit was sold to physicians for use in transanal hemorrhoidal dearterialization, a surgical procedure that involves cauterizing certain blood vessels, officials said.

It's alleged that, between 2014 and 2017, physicians performing procedures using the Kit were required to bill for the procedure using a temporary code, also known as a “T-Code,” assigned for new and emerging services.

Because a procedure that is assigned such a code is considered experimental, reimbursement for the use of the Kit was often denied. To avoid such denials, and increase potential reimbursement, THD allegedly encouraged colorectal and general surgeons improperly to bill Medicare and Medicaid programs using the T-Code plus an additional CPT code or to bill for CPT codes other than the T-code.

The federal share of the civil settlement is $598,121.23, and the state Medicaid share of the civil settlement is $101,877.77, officials said.

State Medicaid programs are jointly funded by the federal and state governments.