Once a particular medical device or medical equipment has been approved for marketing by the FDA, it may be used for any legal purpose, on label or off-label. It will be paid for by Medicare (fiscal intermediaries and carriers) on a case-by case, as long as there is no National Coverage Determination or Local Medical review policy prohibiting reimbursement for a particular use. The off-label use is not properly paid by Medicare, however, if the use is caused by a manufacturers promotion of the use that (1) involves misleading or fraudulent data concerning such use; and (2) involves kickbacks.

For instance, Drug-elating stents (DES) have been used off-label since their FDA approvals. Two companies compete for the US market: Boston scientific (paclitaxel eluting stat) and Johnson and Johnson (Cypher Sirolimus eluting stent). When recent evidence showed that the DESes increase the risk of blood clots compared to their predecessor bare metal stents, the Centers for Medicare and Medicaid Services (CMS) initiated a review process to articulate a National Coverage Determination, which will likely result in reigning in some of the inappropriate off-label use that has gone on for years.

Evidence of fraudulent conduct resulting in the prescribing of DESes or other medical devices, such that patients are unnecessarily put at significantly higher risk, could make a very compelling False Claims Act qui tam case against a manufacturer, resulting in the recovery of all inappropriate Medicare payments made based upon such improper uses.

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