WASHINGTON—Medical diagnostic testing company LifeWatch Services Inc. has agreed to pay $18.5 million to settle charges that it submitted false claims to federal health care programs, the Department of Justice said Friday.
The Justice Department said the settlement resolves two lawsuits filed under whistle-blower provisions of the False Claims Act. The DOJ said the settlement “does not constitute a determination of liability.”
The complaints alleged that Rosemont, Ill.-based LifeWatch, a unit of Neuhausen am Reinfall, Switzerland-based LifeWatch A.G., improperly billed Medicare for ambulatory cardiac telemetry services.
The services use cellphone technology to record cardiac events in real time without patient intervention, rather than requiring a patient to press a button to call for help, according to the federal agency.
LifeWatch was aware that such services are ineligible for Medicare reimbursement for patients who had experienced only mild or moderate palpitations, but the company submitted the claims anyway and used a false diagnostic code, according to the whistle-blower complaints.
LifeWatch also provided valuable services in the form of full-time employees to several hospitals and medical practices without charge, which amounted to kickbacks.
Former sales reps brought suits
Two former sales representatives, Ryan Sims and Sara Collins, filed the whistle-blower suits in December 2009 and May 2011, respectively. Under provisions of the False Claims Act, they will receive about $3.4 million plus interest as their share of the settlement proceeds.
“The False Claims Act is a critical tool for weeding out fraud and protecting the taxpayers,” Jenny A. Durkan, U.S. attorney for the western district of Washington in Seattle, said in a statement. “We must ensure tax dollars go to intended programs, not to line the pockets of those who seek to cheat the programs.”
A LifeWatch spokesman could not immediately be reached for comment.
In September, Accenture L.L.P. agreed to pay $63.7 million to resolve a whistle-blower lawsuit brought under the False Claims Act.