The Department of Justice (DOJ) has announced that medical device company Semler Scientific Inc. (Semler) has agreed to pay $29.75 million. Its former distributor, Bard Peripheral Vascular Inc. (Bard), has agreed to pay $7.2 million to resolve allegations that they violated the False Claims Act, 31 U.S.C. §§ 3729-3733. The companies allegedly knowingly caused the submission of false claims to Medicare for tests performed using the FloChec and QuantaFlo devices to diagnose peripheral arterial disease (PAD).
The allegations were originally brought under the qui tam provisions of the False Claims Act by Robert Kane and Franklin W. West, who will receive approximately $6.5 million as their share of the recovery.
“Medical device companies that misrepresent the capabilities of their products and encourage providers to bill Medicare for services that do not meet coverage requirements drain critical taxpayer-funded resources,” said Acting Special Agent in Charge Isaac M. Bledsoe of the Department of Health and Human Services Office of Inspector General (HHS-OIG).
The settlement resolves allegations that Semler and Bard falsely claimed that tests conducted using the FloChec and QuantaFlo devices were reimbursable by Medicare, therefore causing healthcare providers to submit false claims to Medicare. According to DOJ claims, Semler conducted testing using their devices, knowing that the Food and Drug Administration (FDA) had not cleared them to perform an ABI and that they did not satisfy CPT codes 93922, 93923, or 93924.
Moreover, the United States alleged that Medicare reimbursement for such tests is barred because FloChec and QuantaFlo use photoplethysmography. Still, Semler allegedly continued to market the devices as reimbursable by Medicare to healthcare providers, even after receiving concerns from third parties about reimbursement.
“Government programs expect an honest exchange between suppliers and programs funded by taxpayer dollars,” said U.S. Attorney Gregory W. Kehoe for the Middle District of Florida. “When critical information is misrepresented or skewed for profit or personal gain, the limited resources available for our healthcare system are diminished.”
Agent Bledsoe also announced, “In addition to this settlement, HHS-OIG has entered into a new five-year Corporate Integrity Agreement with Semler Scientific, which agreed to undertake substantial internal compliance measures to help ensure that the company remains appropriate and lawful moving forward.”
The claims resolved by the settlement are allegations only, and no determination of liability has been made.
