Philips’
(NYSE: PHG)
BioTelemetry and its LifeWatch subsidiary agreed to pay more than $14.7 million over False Claims Act violation allegations.
Philips acquired BioTelemetry in a $2.8 billion deal in 2021.
The BioTelemetry subsidiary settled allegations of knowingly submitting claims to federal healthcare programs for a higher level of remote cardiac monitoring than physicians intended to order, or that was medically necessary. This inflated the level of reimbursement paid to LifeWatch, according to the U.S. Dept. of Justice (DOJ).
DOJ’s allegations center around the period between July 1, 2014, and Dec. 31, 2020, and the LifeWatch ACT-3L device. It says LifeWatch marketed the device to doctors as capable of performing three different types of heart monitoring services. According to DOJ, the BioTelemetry subsidiary marketed holter monitoring, event monitoring and telemetry.
Of these, telemetry provided the highest rate of reimbursement, DOJ said. The government department says LifeWatch knew the design of their online enrollment portal for the 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.”
DOJ also contended that sales personnel at the company instructed clinical staff to select options resulting in telemetry service enrollment. The allegations say this occurred even when sales personnel knew the physicians intended to order less costly services. According to DOJ, LifeWatch also “disregarded written notes” reflecting physicians’ intent to order services other than telemetry.
Michael Pelletier, an individual employed by one of LifeWatch’s customers, brought forward the claims under the qui tam (whistleblower) provisions of the False Claims Act. Pelletier will receive approximately $2.3 million from the settlement.
“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 DOJ’s Civil Division. “We will hold accountable those who misuse taxpayer-funded programs for their own enrichment.”
