Azon Medical Settles for Over $1 Million Amid Allegations of Improper Billing Practices Under the False Claims Act

PHILADELPHIA, PA — Azon Medical, LLC, a distributor of medical devices, recently agreed to a settlement payment of $1,019,307.86 concerning allegations of improper billing practices under the False Claims Act. The case centers on the distribution and promotion of the AnSiStim device, marketed by Azon as reimbursable by Medicare, despite not meeting the criteria of the billing codes used.

From September to October 2016, the company sold AnSiStim devices, which are electro-acupuncture devices designed to be attached behind the ear using adhesives and needles. These devices, unlike implantable neurostimulators, do not require surgical procedures or anesthesia. Azon's representation of AnSiStim as eligible for Medicare reimbursement under implantable device codes was misleading, as these devices do not qualify for such reimbursement, similar to other devices like Stivax and NeuroStim.

U.S. Attorney Jacqueline C. Romero highlighted the financial impact on Medicare, noting the improper billing led to significant payments to Azon's customers. "Azon was aware of the inappropriate nature of these claims through advisory notices and communications from medical professionals," Romero stated, emphasizing the government's commitment to pursuing false billing schemes.

The investigation, led by the Department of Health and Human Services Office of Inspector General (HHS-OIG), underscores the critical importance of accurate billing practices. Special Agent in Charge Maureen Dixon reiterated the need for truthful communication regarding Medicare reimbursement eligibility. The collaborative efforts of HHS-OIG and the U.S. Attorney's Office aim to safeguard the integrity of Medicare by addressing and rectifying improper billing activities.

This settlement, managed by Assistant U.S. Attorney Mansi G. Shah and former Assistant U.S. Attorney Matthew E.K. Howatt, serves as a cautionary tale for marketers and distributors. The resolved civil claims remain allegations with no admission of civil liability.

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