BioTelemetry to Pay $44,875,000 to Resolve False Claims Act Allegations

BioTelemetry, Inc. (NASDAQ: BEAT)

PHILADELPHIA, PA — BioTelemetry, Inc. and its subsidiary CardioNet, LLC, both headquartered in Malvern, Pennsylvania (collectively, “BioTelemetry”), have agreed to pay $44,875,000 to resolve allegations that they violated the False Claims Act by knowingly submitting claims to Medicare, TRICARE, the Veterans Health Administration, and the Federal Employee Health Benefits Program for heart monitoring tests that were performed, in part, outside the United States, and in many cases by technicians who were not qualified to perform such tests.

The United States alleged that BioTelemetry and CardioNet improperly billed Medicare and other federal healthcare programs for certain cardiac monitoring services – including Holter, event monitoring, and mobile cardiovascular telemetry (MCT) tests – that were performed overseas in violation of federal law that prohibits payment for services furnished outside the United States.  More specifically, the government alleged that in 2013, CardioNet contracted with a company located in India for the provision of diagnostic and analysis services of heart monitoring data.  Although BioTelemetry set up a workflow that was designed to route electrocardiogram data, including data relating to cardiac events (“ECG Data”) for certain federal payer patients to a domestic independent diagnostic testing facility for review and analysis, the government alleged that BioTelemetry—with the knowledge of then senior management—diverted certain federal beneficiaries’ ECG Data to India when the domestic workflow became backlogged.   BioTelemetry also allegedly sent ECG data for other federal payer patients directly to India for review. In 2014, over 29% of the ECG Data reviewed in connection with MCT tests, and over 78% of the ECG Data reviewed in connection with event monitoring tests, for Medicare patients were allegedly reviewed by technicians located in India. In 2015, those numbers allegedly rose to over 47% and over 88%, respectively. Although BioTelemetry began implementing technological controls in late 2015 to prevent personnel in India from accessing the domestic workflow, those controls were insufficient, and technicians in India allegedly continued to review and analyze some ECG Data for federal healthcare program beneficiaries thereafter.

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The United States further alleged that most of the offshore technicians tasked with reviewing ECG Data for federal healthcare program beneficiaries did not have the basic qualifications to perform the tests in question.  Of the more than 450 India-based technicians who reviewed Medicare patients’ ECG Data in connection with MCT services that CardioNet billed to Medicare during the 2013 to 2018 period, the government alleged that fewer than 3% were certified by Cardiovascular Credentialing International (CCI), the only recognized credentialing body for such cardiovascular technicians.

“Federal healthcare beneficiaries deserve care, including remote cardiac monitoring, that complies with federal law and is provided by qualified clinical personnel,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “[The] settlement reminds all providers that they must observe those standards and reflects the Department’s commitment to pursue knowing violations of federal health care program requirements.”

“Providers must act within clear federal healthcare program boundaries to ensure that appropriate care is given to the beneficiaries of those programs,” said Jacqueline C. Romero, United States Attorney for the Eastern District of Pennsylvania. “This office will continue to pursue cases where providers have failed to honor these rules, which were established to provide quality care to elderly citizens and military veterans, among others.”

“Providers participating in federal health care programs are obligated to obey the laws meant to protect the integrity of those programs and the quality of care furnished to patients,” said Special Agent in Charge Maureen R. Dixon of the Department of Health and Human Services. “With our law enforcement partners, our agency is extremely committed to investigating providers alleged of defying these requirements.”

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“Protecting TRICARE, the healthcare system for military members and their dependents, is a top priority for the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense Office of Inspector General,” stated Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. “The settlement agreement… demonstrates our ongoing commitment to work with our law enforcement partners, the Department of Justice, and the Defense Health Agency to investigate allegations of healthcare fraud.”

In connection with the settlement, BioTelemetry Inc. entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires, among other things, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks.  The CIA also requires an independent review organization to annually assess the medical necessity and appropriateness of claims billed to Medicare.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by several relators who were former CardioNet employees.  Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.  The qui tam case is captioned U.S. ex rel. Doe v. BioTelemetry, Inc., et al., No. No. 2:18-cv-01688-PD (E.D. Pa.).  As part of this week’s resolution, the whistleblowers will receive approximately $8.3 million.

The resolution obtained in this matter was the result of a coordinated effort between the United States Attorney’s Office for the Eastern District of Pennsylvania and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section.  Assistance was provided by HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the Department of Veterans Affairs Office of Inspector General, and the Office of Personnel Management’s Office of Inspector General.

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The matter was handled by Assistant United States Attorneys Eric Gill and Erin Lindgren and Civil Division attorneys Amy Kossak and Jessica Sievert.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

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