Diopsys, Inc., a medical device manufacturer headquartered in Middletown, Pennsylvania, has agreed to a settlement amounting to $14.25 million. This settlement resolves accusations that the company violated the federal False Claims Act and various state laws by submitting or facilitating false claims for Medicare and Medicaid payments related to vision testing services. The announcement came from U.S. Attorney John Giordano.
The allegations focus on Diopsys’ NOVA device, approved by the U.S. Food and Drug Administration (FDA) for visual evoked potential (VEP) testing. The United States government alleged that between January 1, 2015, and December 31, 2021, Diopsys contributed to false claims submissions for Medicare and Medicaid reimbursements for electroretinography (ERG) vision tests. The NOVA device reportedly lacked FDA clearance for this specific vision test. Furthermore, it was claimed that Diopsys made substantial, unapproved modifications to the NOVA device.
U.S. Attorney John Giordano stated, “Today’s resolution reaffirms our commitment to protect the integrity of the Medicare and Medicaid programs. Health care companies must not encourage doctors to submit claims for payment for medically unnecessary tests.”
According to the settlement terms, Diopsys is to make guaranteed payments of $1,225,000 and contingent payments up to $13,025,000, depending on the financial situation of the company.
The civil settlement also resolves claims filed under the qui tam or whistleblower provisions of the False Claims Act by Dr. Atul Jain, a California ophthalmologist. Under these provisions, individuals can file lawsuits on behalf of the United States and may receive a portion of the recovery. Dr. Jain is set to receive at least $207,000 from the federal recovery, with the guaranteed payment of $1,120,000 and an additional $11,900,000 in contingent payments forming the federal portion.
This resolution was a result of collaboration among the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the United States Attorney’s Office for the District of New Jersey, and the U.S. Department of Health and Human Services Office of Inspector General.
The investigation exemplifies the government’s ongoing push against healthcare fraud. The False Claims Act is a critical tool in these efforts. Concerns about potential fraud, waste, or abuse can be reported to the Department of Health and Human Services.
The case, titled United States ex rel. Jain v. Diopsys, Inc., et al., is identified as Civil Action No. 21-18151 (D.N.J.). Assistant U.S. Attorney David Simunovich and Trial Attorney Daniel Meyler managed the case proceedings.
The resolution addresses allegations with no admission of liability.
Counsel for Diopsys, Inc. is Paul Fishman, based in Newark, New Jersey. Justin Berger, Esq., located in San Mateo, California, represents Dr. Atul Jain, the relator.
