BioTelemetry Inc. and its subsidiary, LifeWatch Services Inc., headquartered in Malvern, Pennsylvania, and Rosemont, Illinois, respectively, (collectively LifeWatch), have agreed to pay more than $14.7 million to resolve allegations that they violated the False Claims Act by knowingly submitting claims to federal health care programs for a higher level of remote cardiac monitoring than physicians had intended to order or that was medically necessary, thus inflating the level of reimbursement paid to LifeWatch.

The United States alleged that, during the period July 1, 2014, through Dec. 31, 2020, LifeWatch marketed its ACT-3L device (also known as the LifeStar ACT-3L and the MCT-3L) to doctors as being capable of performing three different types of heart monitoring services: holter monitoring, event monitoring and telemetry. Of these, telemetry provided the highest rate of reimbursement. The United States contended that LifeWatch knew the design of their online enrollment portal for the ACT-3L device caused unwitting clinical staff to select 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’s sales personnel instructed clinical staff to select the options that resulted in patients being enrolled for telemetry services, even when the sales personnel knew the clinic’s physicians intended to order less costly services. LifeWatch also allegedly disregarded written notes that clinic personnel included in patient enrollments that specifically reflected the treating physicians’ intent to order a service other than telemetry.

“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.”

“Our health care system is based on doctors choosing the level of care appropriate for their patients,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “It undermines this system and costs taxpayers if companies design systems that make it harder for physicians to order only necessary services and also use their sales force to mislead health care practitioners, as we allege happened here. Our office is committed to holding accountable companies who try to take advantage of the system in these ways.”

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