ACell MicroMatrix: The Product Came Back, the Explanation Did Not

In the ACell MicroMatrix 2019 settlement, ACell agreed to pay $12 million to resolve allegations that unsupported promotion, incorrect Medicare coding advice and improper inducements caused false claims to federal health care programs. Alongside that civil case, the company admitted in a guilty plea that it removed contaminated wound-care devices without telling doctors, hospitals or its own sales force why they were coming back.

ACell was a Maryland medical-device manufacturer. MicroMatrix was its powder wound dressing, indicated for topical wounds. A former employee brought the qui tam case under the False Claims Act, and the Department of Justice announced the resolution on June 11, 2019.

The MicroMatrix Removal Kept Doctors in the Dark

In its guilty plea, ACell admitted learning in January 2012 that more than 30,000 MicroMatrix devices contained endotoxin at levels that posed a risk to patient health. It began removing certain sizes from the market because of that risk, but did not report the removal to the Food and Drug Administration. The Justice Department explained that endotoxin exposure can cause fever, infection, septic shock and death.

The criminal information described where the devices were being retrieved: sales representatives’ inventories, hospitals and other healthcare centers. The information charged that ACell removed the devices from those locations to reduce a health risk while failing to report the removal.

ACell’s admissions went further. It concealed the reason for the removal from doctors, hospitals and its sales force. It also failed to notify doctors who had already used devices from the affected lots about the elevated endotoxin levels.

ACell knew why the devices were coming back and admitted withholding that explanation from the people using and selling them. For a quality or sales insider, that is the telling detail: the instruction to retrieve a product and the explanation given to a customer can be very different accounts of the same event.

The Civil Allegations Followed the Sale Into the Claim

The civil False Claims Act case concerned what ACell allegedly did to generate product use, orders and reimbursement. The government described three routes from the manufacturer’s decisions to claims submitted to federal health care programs.

Internal Use Promoted Without Clinical Data

The United States alleged that, beginning in 2011, management directed sales representatives to tell physicians that non-topical and internal use of MicroMatrix was safe and effective. The representatives allegedly knew that no clinical data supported those statements.

The product’s indication was for topical wounds. The alleged pitch promised safety and effectiveness inside the body, and the government said the people delivering it knew the supporting clinical data did not exist. What management told representatives to say, and what they then told physicians, connected the manufacturer’s conduct to the treatment decision.

Coding Advice Continued After Two Consultants Objected

The government’s coding allegation concerned guidance that ACell supplied to healthcare providers beginning in March 2012. The United States contended that the recommendations were incorrect, inflated Medicare reimbursement, and continued even after two separate coding consultants told ACell the guidance was wrong.

ACell allegedly had contrary advice in hand and continued sending providers the same reimbursement guidance. An employee familiar with those recommendations could see both what the provider was being told and what the manufacturer had already learned about it.

ACell’s alleged role reached into the provider’s billing through the coding advice it supplied. That is how a manufacturer’s reimbursement team can become part of a case about someone else’s claim.

Benefits Intended to Encourage Orders

The United States also alleged that ACell offered prescribers entertainment, payments for participation in its speaker program and free product to encourage orders. The alleged benefits were tied to the purchasing decision: who would choose ACell products, and what the company offered to influence that choice.

What the Complaint Said About the Sales Pitch

The whistleblower’s complaint described pressure to sell larger quantities, including instructions to conceal smaller MicroMatrix sizes from purchasers. It alleged that sales management told representatives to disclose only the larger options even when smaller sizes would reduce waste:

The complaint also described a company guide matching the amount of MicroMatrix powder to wound size. According to the whistleblower, representatives had received that guide through the company’s shared files, but it became obsolete under a new strategy focused on sales and profits rather than patient outcomes. The alleged change was concrete: a wound-size guide gave way to a sales instruction about which package sizes the purchaser should hear about.

Another allegation connected the sales pitch directly to reimbursement. At a meeting, a sales manager allegedly offered to cancel the product invoice if Medicare denied the case:

The complaint separately alleged that regional and area managers instructed representatives to give away ACell’s MatriStem products for follow-up procedures when patients had started treatment as hospital inpatients. Those allegations show why product quantities, invoices and promises about reimbursement belong in the same conversation about how an order was won.

The Civil Settlement and Whistleblower Reward

The civil agreement called for payment over five years. The Justice Department announced that the former employee who brought the case would receive a whistleblower reward of about $2.4 million from the civil settlement.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Alongside the civil settlement, ACell entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General. It required training, auditing and monitoring of promotional and other activities at issue in the case.

What Evidence Is Needed to Prove Fraud?

We work with insiders to assess what their product, sales and reimbursement records can show. In ACell’s case, the coding allegation connected the manufacturer’s advice to what providers sought from Medicare.

The 2020 review A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, published in the Journal of Forensic and Investigative Accounting, places the claim for payment at the center of the False Claims Act analysis. The removal admissions describe what ACell knew about the product and withheld from others. The civil allegations describe how its commercial practices allegedly caused false claims.

A related information gap appeared in Zyno Medical’s 2022 settlement over allegedly causing claims involving defective IV administration sets. Zyno admitted knowing about leaks and continuing sales before recalling the sets. In its guilty plea, ACell admitted removing product while concealing the reason. An insider’s view of what management knew can explain a sales or removal decision that a provider’s bill alone cannot.

You Saw What the Customer Was Told

If you know why a wound-care product was pulled, what the sales team promised or why disputed coding advice stayed in circulation, talk to our whistleblower experts about what you saw. We build your strongest medical device whistleblower case with you, connect the product decisions to the government claims, and bring in medical device fraud whistleblower lawyers who understand manufacturer promotion and Medicare billing. We stay beside you through the case, with your knowledge of the business at the center of the work.