PHILADELPHIA, PA — Malvern-based BioTelemetry, Inc. (NASDAQ: BEAT) and its subsidiary LifeWatch Services, Inc., both leaders in remote cardiac monitoring services, this week agreed to pay $14,734,628 to settle allegations of violating the False Claims Act. The Pennsylvania-based companies were accused of knowingly submitting false claims to federal health care programs for a higher level of service than was medically necessary or intended by physicians.
From July 1, 2014, through December 31, 2020, the defendants marketed LifeWatch’s ACT-3L device to doctors as capable of performing three types of heart monitoring services: Holter, event monitoring, and telemetry. The latter, telemetry, provided the highest rate of reimbursement from federal healthcare programs.
The U.S. contends that the design of LifeWatch Connect, the online enrollment portal for this device, led unwitting clinical staff to select options that enrolled patients in the more expensive telemetry service, even when a less costly service was intended. Sales personnel allegedly instructed clinical staff to choose these options, despite knowledge of the clinic’s physicians intending to order event monitoring. Furthermore, the defendants allegedly disregarded notes from clinics requesting event monitoring and failed to consistently comply with instructions about appropriate handling of enrollments.
“Companies that bill Medicare and other federal healthcare programs must ensure that they are billing for the services actually ordered by medical providers, rather than the most expensive service,” said Jacqueline C. Romero, United States Attorney for the Eastern District of Pennsylvania. She emphasized the office’s commitment to pursuing cases that reduce costs for the government while ensuring patients receive consistent and quality care prescribed by their physicians.
The settlement also resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Michael Pelletier, an individual employed by one of Defendants’ customers, and SFP I, LLC. These provisions allow a private party to file an action on behalf of the U.S. and receive a portion of any recovery. The qui tam case resolved for $1.78 million.
The resolution was achieved through a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Offices for the Eastern District of Pennsylvania and the District of New Jersey. Assistance was provided by several government departments, including Health and Human Services’ Office of Inspector General (HHS-OIG), the Department of Defense’s Defense Criminal Investigative Service, and more.
While the allegations have been resolved with the settlement, it’s important to note that no liability has been determined. Assistant U.S. Attorney Erin Lindgren and Auditor Dawn Wiggins handled the EDPA matter.
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