EndoGastric Solutions Coughs Up but Admits No Wrongdoing

Endoluminal gastroesophageal reflux disease device company EndoGastric Solutions® (EGS) has reached a civil settlement with the U.S. Department of Justice over alleged misuse of procedure codes that will cost it $5.25 million.


EndoGastric Solutions, Inc. is an established leader in the endoluminal treatment of digestive diseases, its EsophyX® device having been available in the U.S. for seven years, and utilized in more than 15,000 Transoral Incisionless Fundoplication (TIF®) procedures worldwide.

The recent litigation 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, while admitting no wrongdoing, has agreed to draw a line under proceedings with a $5.25 million settlement, plus accrued interest, that will be paid partly over five years and partly in a contingent amount dependent partly upon EGS’ achievement of specific milestones.

In addition, the company says it has entered into a separate agreement that sees it agreeing to certain measures to avoid future misdemeanours. This Corporate Integrity Agreement (CIA) with the Office of the Inspector General, United States Department of Health and Human Services (OIG-HHS) requires EGS 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.

Company comments

“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.”

Source: EndoGastric Solutions, Inc.

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