Nearly $15 Million Settlement Reached with Company Over Inflated Insurance Reimbursement Amounts
The United States Department of Justice recently reached a $14.7 million settlement with BioTelemetry, Inc. and its subsidiary, LifeWatch Services, Inc. over allegations that the companies violated the False Claims Act by knowingly submitting claims to federal health care programs for a higher level of remote cardiac monitoring than physicians intended to order or than was medically necessary, thereby inflating the reimbursement paid to LifeWatch.
According to the allegations made the United States, LifeWatch marketed its ACT-3L device to doctors as being able to perform three different types of heart monitoring services: Holter monitoring, cardiac event monitoring, and mobile cardiovascular telemetry. LifeWatch and BioTelemetry also own and operate independent diagnostic testing facilities that perform the technical components of the heart monitoring services using various cardiac monitoring devices. The United States alleged that from July 1, 2014, through December 31, 2020, the companies submitted claims to federal health care programs for the above-listed services performed by the independent diagnostic testing facilities using specific CPT codes.
The United States alleged that LifeWatch knew the design of their online enrollment portal for the ACT-3L device, LifeWatch Connect, could cause “unwitting clinical staff” to choose options that would enroll the patient in the most expensive service, telemetry, even when the doctor intended to order a less expensive service. The United States also contended that LifeWatch sales personnel instructed clinical staff to select options that would result in patients being enrolled in telemetry services, even if the sales personnel knew the treating physician intended to order a less expensive service. Finally, LifeWatch allegedly disregarded written notices from clinic personnel that specifically stated the treating physicians’ intent to order a service other than telemetry.
To resolve the allegations above, BioTelemetry and LifeWatch agree to pay a total of $14,734,628, of which $7,367,314 is restitution.
The case was initially brought under the qui tam provisions of the False Claims Act by an employee of one of LifeWatch’s customers and a separate claim brought forth by an LLC with three members (including a physician). For their roles in the case, the individual will receive roughly $2.3 million and the LLC will receive roughly $270,000.
The claims resolved by the settlement are only allegations as there has been no determination of liability and BioTelemetry and LifeWatch deny the United States’ allegations.
“Diagnostic companies, like other providers, are expected to bill federal healthcare programs only for medically necessary services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable those who misuse taxpayer-funded programs for their own enrichment.”