Health Law Daily Wrap Up, FALSE CLAIMS ACT—SETTLEMENT AGREEMENTS: Tactile Systems Technology will pay $550K+ to settle FCA claims, (Jul 31, 2026)

By Sherri M. Schroeder, J.D.

The medical device marketer was accused of submitting false Medicare claims for Entre and Flexitouch pneumatic compression devices when those devices were not medically necessary.

Tactile Systems Technology, Inc., a Delaware corporation headquartered in Minneapolis, Minnesota, has agreed to pay $550,959 to settle the claims made against it in qui tam actions filed by three persons in Massachusetts and Minnesota. These Relators claimed that Tactile’s sales personnel fabricated or amended health care professionals’ medical records and documentation that Tactile used to submit claims to Medicare in violation of the False Claims Act (FCA). Specifically, they claim that Tactile personnel inserted false statements about patients’ lack of relief through basic compression therapy and forged signatures on doctored medical records to make it appear as through the practitioners had prescribed Tactile’s pneumatic compression devices. Tactile, who terminated the employment of many of these sales personnel upon learning of the conduct, was given credit for assisting the U.S.’s damage analysis and accepting responsibility for the misconduct (Settlement Agreement, U.S. ex rel. Gorham and Gast v. Tactile Systems Technology, Inc., No. 21-cv-11809 (D. Mass. July 14, 2026).

Devices. Tactile markets at-home pneumatic compression devices used to treat chronic swelling caused by lymphedema and chronic venous insufficiency. Tactile marked two such devices during the relevant period (January 1, 2019, through December 31, 2024): a basic model called the Entre and an advanced model called the Flexitouch. The devices are designed to apply rhythmic, sequential pressure to body parts to enhance blood and lymphatic flow, reduce swelling, and prevent venous thromboembolism. The devices are marketed to vascular surgeons, cardiologists, certified lymphedema therapists, and other health care professionals.

Medicare covers such devices when health care professionals perform conservative modes of therapy, including basic compression with bandages, for at least four weeks before billing Medicare for prescribing pneumatic compression devices as treatment. Medicare requires the health care professionals to explain why basic compression was inadequate to treat the patient.

Legal action. In May of 2021, a Relator filed a qui tam action in a Massachusetts district court against Tactile for violation of the FCA. In September of 2021, two other Relators filed an action against Tactile for FCA violations in a Minnesota district court. The Minnesota action was then transferred to Massachusetts in November 2021. The Settlement Agreement was entered into among the United States of America acting through the U.S. Department of Justice and on behalf of HHS’s Office of Inspector General (OIG) and the U.S. Postal Service’s OIG.

Admissions. Tactile admitted, acknowledged, and accepted responsibility for the following actions in the Settlement Agreement. During the relevant period, certain Tactile sales personnel inserted false statements about a patient’s failure to experience relief through basic compression therapy and forged health care professionals’ signatures on doctored medical records and other clinical documentation to make it appear as though the professionals had prescribed the Entre or Flexitouch. Certain Tactile sales personnel also fabricated or amended medical records and documentation to falsely state that patients did not experience a sufficient reduction in swelling using the Entre and benefitted more from a trial of the more expensive Flexitouch. Tactile then submitted claims using the false records and documentation to Medicare for reimbursement, which is a violation of the FCA.

Remediation. At various times during the relevant period, Tactile’s Compliance Department investigated their sales personnel and learned that certain sales personnel had fabricated or amended the medical records to sell more devices. Tactile then punished and/or terminated these sales personnel and voluntarily repaid Medicare for certain claims Tactile deemed to be for medically unnecessary compression devices. Tactile received credit under U.S. Department of Justice guidelines for taking disclosure, cooperation, and remediation into account. The cooperation provided by Tactile included assisting and facilitating the U.S.’s damage analysis and accepting responsibility for the misconduct.

Settlement. To settle the claims against it, Tactile agreed to pay $550,959 plus interest to the U.S. Of this amount, $275,479.50 was restitution. Conditioned upon receipt, the U.S. will then pay the Massachusetts Relator $129,475.37 plus interest, which will then be divided in accordance with a separate agreement entered into between the Relators.

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