On December 18, the United States Attorney for the Eastern District of Pennsylvania announced a $14.7 million False Claims Act (FCA) settlement with BioTelemetry, Inc. and its subsidiary, LifeWatch Services, Inc over allegations that the companies billed federal healthcare programs for more expensive services than physicians intended to order.
According to the government, BioTelemetry and LifeWatch violated the FCA “when LifeWatch, through its marketing and enrollment process for remote cardiac monitoring services, knowingly submitted false claims to federal health care programs for a higher level of remote cardiac monitoring service than physicians had intended to order or which was medically necessary, thus resulting in a higher level of reimbursement to LifeWatch.”
In particular, the government’s allegations center around LifeWatch’s ACT-3L device which it marketed as being capable of performing three different types of heart monitoring services: Holter, event monitoring, and telemetry. Of these, telemetry offers the highest rate of reimbursement from federal healthcare programs.
According to the government, BioTelemetry and LifeWatch “knew the design of LifeWatch Connect (the online enrollment portal for this device) caused unwitting clinical staff to select options that would enroll the patient in telemetry, even when the doctor intended to order a less expensive service.” The government further alleges that the companies’ “sales personnel instructed clinical staff to select these options—even when Defendants knew the clinic’s physicians intended to order event monitoring for many or all patients—and then provided and billed for telemetry services.”
“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. “This office will continue to pursue cases that will reduce costs for the government while ensuring that patients receive consistent and quality care, as prescribed by their physicians.”
The settlement stems from qui tam whistleblower lawsuits filed by Michael Pelletier, an employee of one of LifeWatch’s customers, and by SFP I, LLC. Qui tam enables private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. In successful qui tam suits, whistleblowers are entitled to 15-30% of the funds collected by the government.
According to the government, Michael Pelletier will receive approximately $2.3 million, and SFP I, LLC will receive approximately $270,000.
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”