Second Cardiac Monitoring Company Pays $6.4 Million To Settle Allegations It Overbilled Government Medical Program

A second heart monitoring company, BioTelemetry, Inc., is resolving allegations that it overbilled Medicare for outpatient services that were not medically necessary, announced Acting U.S. Attorney Annette L. Hayes.  BioTelemetry has agreed to pay $6.4 million to resolve allegations that its subsidiary, CardioNet, improperly billed the Medicare Program for Mobile Cardiac Outpatient Telemetry (MCOT) services when those services were not reasonable or medically necessary.  This is the second cardiac monitoring company to settle overbilling charges for these services following an investigation led in Western Washington.  In March 2012, LifeWatch Services, Inc., of Rosemont, Illinois, agreed to pay the United States $18.5 million to resolve allegations that the company submitted false claims to federal health care programs.  The investigation of CardioNet’s billing practices grew out of a qui tam or “whistleblower” lawsuit against LifeWatch.

“Billing for a higher-level service that is not necessary to treat a patient’s condition to receive higher reimbursement from federal health care programs will not be tolerated,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”

“Today’s settlement is another example of how we will act to stop abusive billing practices and hold companies accountable for conduct that raises everyone’s healthcare costs,” said Acting U.S. Attorney Annette L. Hayes for the Western District of Washington.  “This settlement should send a message to all providers: do not misuse federal billing systems to improperly gouge the healthcare system upon which so many Americans rely.”

An MCOT monitor is a real-time, outpatient cardiac monitoring service.  MCOT monitors are worn by patients for a period of time during which the device continuously records the activities of the patient’s heart, including any irregular rhythms.  The MCOT monitor differs from traditional, less expensive event monitors in that it incorporates cell phone technology, which allows it to continuously transmit data to CardioNet’s diagnostic center (whereas traditional event monitors only download data periodically through a landline).

The government’s investigation revealed that CardioNet was aware that MCOT services were not eligible for Medicare reimbursement when provided to patients who had experienced only mild or moderate heart palpitations, since less expensive “event” or “Holter monitors” could effectively collect data about those patients’ conditions.  Nonetheless, the government’s investigation revealed that CardioNet knowingly submitted claims to Medicare for more expensive MCOT services by using an inaccurate diagnostic code that ensured that the claims would be reimbursed by Medicare at a higher rate.

“Sticking taxpayers with a hefty bill for unneeded medical care will never be tolerated,” said Special Agent in Charge Ivan Negroni of U.S. Health and Human Services, Office of Inspector General, Regional Office including Washington.  “Working in close coordination with our law enforcement partners we will tirelessly pursue and prosecute these suspected violators.”

“Federal employees deserve health care providers, including remote monitoring companies, that meet the highest standards of ethical and professional behavior,” said Patrick E. McFarland, Inspector General of the U.S. Office of Personnel Management.  “Today's settlement reminds all providers that they must observe those standards, and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal billings that increase the cost of medical care.”

The claims resolved by this agreement are allegations only, and there has been no determination of liability.

The settlement was negotiated by Assistant United States Attorney Kayla Stahman of the U.S. Attorney’s Office, Western District of Washington, who was assisted by investigators from the Office of Inspector General of the Department of Health and Human Services and the Office of Inspector General for the Office of Personnel Management.