Ra Medical Systems: Training Fees and the High-Volume Customer List

The Ra Medical Systems kickback settlement and two physician agreements totaled over $8 million, resolving allegations that cash, training fees and consulting payments induced physicians to use its DABRA laser. The government alleged that the company tracked high-volume physician customers in an internal document titled “Who Deserve[] Love” to decide whom to target with improper payments. For someone inside device sales, that is a recognizable connection between the account report and the money going to the doctor.

Ra Medical manufactured and sold DABRA from 2017 through 2019 and was formerly headquartered in Carlsbad, California. A whistleblower brought the claims as a qui tam case under the False Claims Act. The Department of Justice’s account of the case describes allegations about how the company marketed the laser, what it knew about its performance and how it paid physicians to use it. The company agreement also required additional payments if specified financial events occurred.

DABRA Promotion and the Recall

The government alleged that Ra Medical marketed DABRA for atherectomy even though the Food and Drug Administration had not approved the laser for that procedure. Atherectomy mechanically removes plaque from blocked blood vessels in patients with peripheral artery disease.

The Department of Justice also alleged that Ra Medical knowingly marketed DABRA despite frequent calibration and overheating problems. Those performance problems posed risks to physicians and patients and prompted an August 2019 recall, according to the announcement. Patients faced the product risks while taxpayers had a stake in whether payments to doctors influenced the care public programs funded.

For an insider, those are familiar parts of different jobs. The person presenting the laser may know what doctors were told. Someone handling product complaints may know what happened when it was used. Someone approving consulting fees may know why a particular doctor was offered the work. Connecting those accounts is how the company’s commercial decisions come into view.

What Are Some Examples of Kickbacks in Healthcare?

The Ra Medical case supplies a specific example of alleged healthcare kickbacks: cash payments and fees connected to purported training events and consulting services, offered to induce physicians to use DABRA. The government tied those benefits to the company’s tracking of its high-volume physician customers.

That alleged targeting gives the payment records their meaning. A consulting invoice describes a service. A utilization report describes a customer. The government’s allegation was that Ra Medical used the latter to decide who should receive an improper offer. The commercial value of the physician’s device use allegedly helped determine who would get paid.

A sales employee could recognize the account relationship. A person administering training could recognize the fee. The point where those two records meet is the part of this case that a generic description of consulting payments misses.

What Training Does in the Device Business

Technical support is part of how medical devices reach patients. The Association of periOperative Registered Nurses explains in its position on industry representatives that an educated representative can provide instruction and technical assistance during a procedure, potentially reducing procedure time and helping patient outcomes. The same guidance identifies representatives’ potential influence over physicians’ product selection.

That is why the work behind a training payment matters. What instruction was needed, what service was delivered and why the physician was selected tell a more useful story than the expense category alone. In the DABRA case, the government’s account specifically connected purported training and consulting fees to high-volume users.

A 2020 review in the Journal of Forensic and Investigative Accounting, A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, describes kickback arrangements involving direct or indirect compensation, in cash or in kind, and examines the purpose behind a payment. Applied to the Ra Medical allegations, that perspective puts the reason for selecting the physician beside the description on the invoice. The training label is the beginning of that inquiry.

Why Is Kickback Illegal?

A kickback lets a seller’s payment influence a medical decision that patients and taxpayers rely on. In its explanation of the Anti-Kickback Statute, the Department of Justice says the law prohibits offering or paying something of value to induce referrals of items or services covered by Medicare and other federally funded programs. The law protects the provider’s judgment from improper financial incentives.

The split between who buys and who chooses is familiar elsewhere in the device business. In its alert on physician-owned entities, the Department of Health and Human Services Office of Inspector General explains that implantable devices are often physician preference items. The physician may make or strongly influence the brand and device choice while the hospital or surgery center purchases it.

Ra Medical’s alleged inducements likewise targeted the physician’s decision to use the product. The federal health care programs named in the announcement were Medicare, Medicaid and TRICARE. For a whistleblower case, the connection runs from the manufacturer’s benefit to the physician’s device choice and then to the provider’s claim for the resulting care. That is where a commercial incentive reaches public money.

The Company Payment and the Later Physician Settlements

Ra Medical paid $2.5 million upfront under its December 2020 agreement and would pay up to $28 million more if specified financial contingencies were met. The Department of Justice said it used its inability-to-pay settlement guidelines.

One of them was met. In January 2023, the company’s reverse merger with Catheter Precision triggered an additional $5 million payment, which the Department of Justice reported that Ra Medical paid.

The physicians’ agreements were separate. A Michigan physician and two of his companies agreed to pay $450,000. A Louisiana physician and his consulting company agreed to pay $250,000. The government pursued the alleged recipients as well as the manufacturer offering the payments.

The Department of Justice announced the three civil settlements on September 25, 2024.

What Evidence Is Needed to Prove Fraud?

We work with device insiders to assess what their records show about physician payments and the care billed to public programs. In Ra Medical’s case, the government alleged that an internal utilization document helped the company choose physicians to target with improper offers.

The company’s account information can explain why a physician was chosen for a consulting offer. We examine those relationships with insiders who understand the accounts and the services behind them. Someone handling calibration complaints or overheating may know another part of the story: what the company knew while it continued marketing the device.

How Much Is a Whistleblower Claim Worth?

The Department of Justice announced a combined whistleblower reward of about $1.7 million from the three Ra Medical and physician settlements.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In a case built around device choice, the insider’s contribution is the connection between the commercial records and the care billed to a public program.

You Know Why That Doctor Was Chosen

If training fees or consulting offers followed your company’s high-volume physician list, talk with our whistleblower experts about what you saw. We work with you to build the case around those sales decisions and bring in medical device fraud whistleblower lawyers who understand physician payments and provider claims. We stay beside you as partners throughout the case.