SAN MATEO, Calif. (February 19, 2014)–EndoGastric Solutions® (EGS), the leader in endoluminal reconstructive treatment for gastroesophageal reflux disease, announced today that it has reached a civil settlement with the U.S. Department of Justice related to allegations that EGS encouraged providers to submit claims for its transoral fundoplication procedures using incorrect procedure codes, and that its co-marketing program was a potential inducement to purchase its products. The Company admits no wrongdoing as part of the settlement.
The $5.25 million settlement, plus accrued interest, will be paid partly over five years and partly in a contingent amount dependent partly upon EGS’ achievement of specific milestones.
In addition, EGS has entered into a Corporate Integrity Agreement (CIA) with the Office of the Inspector General, United States Department of Health and Human Services (OIG-HHS). Under the CIA, EGS is required to maintain its current compliance program and to undertake a series of additional compliance measures, including training and monitoring procedures and maintaining a disciplinary process for compliance obligations for at least 5 years.
“EGS cooperated fully with this investigation, and was able to bring the matter to a quick resolution due to internal corrective actions and new policies that had been initiated long before we learned of the investigation,” stated Michael Kleine, Executive Chairman of the Board of Directors. “The settlement is consistent with the company’s direction which values integrity and has demonstrated a commitment to compliance since I have become a part of the organization. We believe the full resolution of this matter and the elimination of related financial uncertainty is in the best interests of the Company, its investors and, most importantly, patients who benefit every day from our products.”
Now that this matter has been settled, the company will work diligently to build upon its current achievements. The EsophyX® device has been available in the United States for seven years, and has been utilized in more than 15,000 Transoral Incisionless Fundoplication (TIF®) procedures worldwide. The TIF procedure is supported by over 40 peer-reviewed clinical papers reporting outcomes on more than 700 patients.
Moving forward the company is investing in initiatives to demonstrate the value of its products to providers and the health care marketplace so that patients and providers will continue to have access to the TIF procedure.