In December, a diagnostic company, BioTelemetry Inc., and its subsidiary LifeWatch Services, Inc., agreed to pay over $14.7 million to settle False Claims Act allegations arising from the company’s submission of claims to federal health programs for remote cardiac monitoring at a higher level than physicians intended to order, resulting in inflated reimbursement.
Pursuant to the Settlement Agreement, the government alleges that between July 1, 2014 and December 31, 2020, LifeWatch marketed a heart monitoring device to physicians as capable of performing three different levels of monitoring, each of which with a corresponding level of reimbursement. However, as part of the alleged scheme, the device’s online enrollment portal was designed in a way to force clinical staff to enroll patients into the highest reimbursed service, even when the physician intended to order a lower level service. Moreover, the company allegedly regularly disregarded clinical notes indicating that a patient was to receive a service other than telemetry (the service with the highest reimbursement). This settlement serves as a reminder that diagnostic companies and other providers must remain cognizant of medical necessity criteria and avoid circumstances that are, or can be interpreted to be, situations of upcoding.
Importantly, this settlement involved the resolution of qui tam or whistleblower claims, which were brought in part by an individual previously employed by the company. The False Claims Act enables a “relator” to bring an action on behalf of the government and, when this results in a recovery for the government, the relator is entitled to receive a portion of this recovery. This amount can be up to thirty percent of the government’s recovery. This potential to participate financially serves as an important incentive for relators to bring allegations of fraud to the government’s attention, thus creating an additional avenue for scrutiny.
Stakeholders must ensure that their billing practices are executed in compliance with applicable laws, particularly in light of the incentives available for whistleblowers. Frier Levitt attorneys regularly advise billing providers on various regulatory issues, including related to the false claims act, to create permissible models and implement appropriate compliance safeguards. Our attorneys also represent clients in connection with criminal investigations and prosecutions and civil and administrative actions in matters related to allegations of false claims, overpayments, and upcoding. Contact Frier Levitt to speak with an experienced attorney to evaluate and mitigate the regulatory risk in your current arrangements or if you need assistance with an ongoing investigation or audit.
