UPDATED April 3, 2015, with comment from BioTelemetry.
CardioNet, which re-branded itself in July 2013 as BioTelemetry after its $11.6 million acquisition of Biotel in 2010, provides remote cardiac monitoring services.
The U.S. Justice Dept. charged the Malvern, Pa.-based company with breaking the False Claims Act by billing Medicare for excessive or unneeded mobile cardiac outpatient telemetry services, despite knowing that its MCOT services are not eligible for reimbursement for patients who only had mild or moderate heart palpitations.
CardioNet had allegedly used an incorrect diagnostic code to ensure its mobile cardiac outpatient telemetry devices would win Medicare reimbursement at a higher rate, the feds alleged. BioTelemetry admitted no liability in agreeing to the settlement, according to the Justice Dept.
The BioTelemetry deal stemmed from a federal probe of another remote monitoring company, Illinois-based LifeWatch Services. Back in 2012, LifeWatch agreed to pay $18.5 million to settle allegations that it submitted bogus diagnostic information to access more Medicare dollars.
CardioNet in 2010 won a shareholder lawsuit accusing it and its management of misleading investors over its prospects for higher Medicare reimbursement.
“We are thankful to have the investigation completed. As previously discussed, the company was not the original target of the investigation and was fully cooperative throughout this inquiry. While we believe the facts did not support the government’s allegations, we entered into settlement negotiations due to the cost and burden of the investigation on the company. As the terms became more reasonable, we felt that it was in the best interest of the company and our shareholders to settle the case. Under the terms of the agreement, there was no determination of liability and BioTelemetry made no admission of wrong doing. In addition, the company was not required to enter into a corporate integrity agreement,” president & CEO Joseph Capper said in prepared remarks. “We can now put this matter behind us and focus completely on executing our strategy in an ethical and compliant fashion, as has always been the case.”