Ra Medical Systems, Inc., False Claims Act, Michigan 2020

Grimy Times

Michigan Medical Device Company Agrees to Pay $8 Million to Resolve False Claims Act Allegations

Ra Medical Systems, Inc., a medical device company formerly headquartered in Carlsbad, California, has agreed to pay over $8 million to resolve allegations of illegal kickbacks and false claims related to its DABRA laser device.

The U.S. Attorney for the Eastern District of Michigan, Dawn N. Ison, announced the settlement on [December 2020], which resolves allegations that Ra Medical marketed the DABRA Laser for use in atherectomies, a procedure for removing plaque from occluded blood vessels, despite the Food and Drug Administration (FDA) not having approved the device for this use.

Ra Medical was also accused of knowingly marketing the DABRA Laser despite product performance issues, including frequent calibration and overheating problems, which posed a risk to physicians and patients. The company was also accused of paying illegal remuneration to certain physicians to induce them to use the DABRA Laser in violation of the Federal Anti-Kickback Statute.

The United States contends that Ra Medical tracked utilization of its high-volume physician customers using an internal document titled ‘Who Deserve[] Love,’ which was used to identify physicians that Ra Medical should target with offers of improper remuneration. Two of the recipients of the alleged kickback payments were Elias Kassab, M.D. of Dearborn, Michigan, and David Allie, M.D. of Lafayette, Louisiana.

Under the terms of the agreement, Ra Medical paid $2.5 million up front and would pay up to $28 million more if future financial contingencies were met. In January 2023, Ra Medical paid an additional $5 million after its reverse merger with Catheter Precision, Inc. triggered one of the contingencies.

Ra Medical is the third party to settle with the government in this case, following separate settlements with Kassab and Allie, who agreed to pay $450,000 and $250,000, respectively, to resolve the allegations against them.

"The United States will not allow doctors to hold out their hands expecting to be paid to use and promote a device," said U.S. Attorney Ison. "The millions of people who depend on our federal healthcare programs deserve and expect medical decisions untainted by kickbacks, and this settlement reflects our commitment to pursuing not just the companies that pay illegal kickbacks, but also the physicians who willingly extract an improper advantage."

Related Federal Cases