Endoscopic Technologies, maker of tools for non-invasive heart surgeries that does business as Estech, says it will pay $1.4 million to settle claims that it gave kickbacks to health-care providers that used its devices, reports VentureWire.
The same suit alleges the San Ramon, Calif.-based company instructed health care providers to pursue inflated Medicare payments for surgeries that used the company's products. As a result, some procedures were performed with the devices when less-invasive means would have been appropriate, complaints stated. There are also claims that Estech marketed its device for the treatment of abnormal heart rhythms, which is not a use approved by the Food and Drug Administration.
The spearheading plaintiff in the suit -- a private citizen -- was awarded $210,000.
Estech raised $8 million in second-round financing at the start of June. It has raised $19.3 million to date from NBGI Ventures, Saints Capital Everest, Telegraph Hill Partners and Waveland Venture Partners.