Feds subpoena TranS1 in fraud probe (MassDevice)
TranS1 Subpoenaed. No Accusations Made (written by Walter Eisner @ OTW)
TranS1, Inc. has received a subpoena from the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS). The subpoena was issued under the authority of the federal healthcare fraud and false claims statutes.
In an 8-K October 17 filing with the SEC, the company stated the OIG was seeking documents for the period of January 1, 2008 through October 6, 2011. TranS1 is cooperating with the government’s request and is in the process of responding to the subpoena. Company officials are unable to predict what action, if any, might be taken in the future by HHS as a result of the subpoena or what impact, if any, the outcome might have on its consolidated financial position, results of operations, or cash flows. The company said no claims have been made against TranS1 at this time.
There was some speculation on Wall Street about the nature of these subpoenas and whether other spine companies had received similar requests. Nothing else had been reported as of this writing. The company has been struggling with reimbursement issues, but has recently been successful in convincing some large insurance carriers to cover their AxiaLIF procedure.
The False Claims Act, 31 U.S.C. §§ 3729-3733, deals with those who knowingly submit, or cause another person or entity to submit, false claims for payment of government funds. The inquiries are often related to a sealed whistleblower lawsuit.
It bears noting that no accusations have been made against the company. As we saw with bone stimulation manufacturers in 2009, the government sometimes uses subpoenas to gather information to settle reimbursement issues.