DOJ settles two qui tam suits against cardiac monitoring company Lifewatch Services

by Ben Vernia | March 26th, 2012

On March 23, the Department of Justice announced that it had settled two whistleblower suits under the False Claims Act, which raised allegations that Lifewatch Services defrauded the Medicare program. According to DOJ’s press release:

LifeWatch Services Inc., a Rosemont, Ill.-based company, has agreed to pay the United States $18.5 million to resolve allegations that the company submitted false claims to federal health care programs, the Justice Department announced today. The settlement resolves two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act.

The two complaints allege that LifeWatch improperly billed Medicare for ambulatory cardiac telemetry (ACT) services. ACT services are a form of cardiac event monitoring that use cell phone technology to record cardiac events in real time without patient intervention. Traditional event monitoring requires the patient to press a button when he or she notices a cardiac event to record the cardiac rhythms. Medicare reimbursed ACT services at between $750 and $1200 and traditional event monitoring services at roughly $250 during the relevant time period.

According to the complaints, LifeWatch was aware that ACT services were not eligible for Medicare reimbursement for patients who had experienced only mild or moderate palpitations. The complaints allege that LifeWatch nonetheless submitted claims to Medicare for ACT services for such patients using a false diagnostic code in order to have the claims paid. In addition, according to the complaints, LifeWatch improperly induced Medicare claims for monitoring services by providing valuable services in the form of full-time employees to several hospitals and medical practices, without charge. The relators (whistleblowers) in their lawsuits alleged that these services amounted to kickbacks.

The Department announced that the whistleblowers would share $3.4 million (an 18.4% relators’ share).

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