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OrthoLogic

This article was originally published in The Gray Sheet

Executive Summary

Agrees to pay the Justice Department $1 mil. by Sept. 20 to settle a December 1996 whistle-blower suit under the False Claims Act, the company reports Sept. 2. Filed under seal by a former employee of OrthoLogic before being taken over by the U.S. Attorney's office in May, the suit alleged the firm sold a small number of custom bone growth stimulators not approved by FDA to Medicare and Medicaid beneficiaries and then billed federal Medicare and TRICARE (formerly CHAMPUS) programs and various state Medicaid programs. An FDA warning letter relating to the devices was issued in May 1996 ("The Gray Sheet" June 17, 1996, In Brief). OrthoLogic denies any wrongdoing or liability with respect to the case. Adjudication of the suit exonerates company officers, employees and directors from any civil damages or civil penalties related to the claims. In addition, the HHS Office of the Inspector General will not exclude OrthoLogic from participating in federal health care programs
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