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Cardiac Monitoring Firms Pay $45M to Settle Whistleblower Allegations they Violated the False Claims Act by Submitting Ineligible Claims to Federal Healthcare Programs

The fraud was exposed by two former company executives who filed a qui tam lawsuit under the False Claims Act. They will share a whistleblower award of $8.3 million.

Pennsylvania-based cardiac monitoring company BioTelemetry, Inc. (Nasdaq: BEAT) and its subsidiary CardioNet LLC have agreed to pay nearly $45 million to resolve allegations they violated the False Claims Act by knowingly billing federal healthcare programs for services performed by cardiovascular technicians located outside the United States in violation of federal law.

According to the U.S. Department of Justice, the companies also violated the False Claims Act by knowingly billing federal healthcare programs for work performed by technicians who lacked required training and certification.

The fraud was exposed by two whistleblowers who sued BioTelemetry and CardioNet under the qui tam provisions of the False Claims Act. A former CardioNet marketing executive and a former CardioNet regulatory and compliance executive, the whistleblowers will share a qui tam whistleblower award of $8.3 million.

Improper billing for services rendered overseas

BioTelemetry through its wholly owned subsidiary CardioNet provides ambulatory heart monitoring services, including Holter monitors (wearable device that records the heart’s rhythm), cardiac event monitoring, and mobile cardiovascular telemetry. The companies also own and operate independent diagnostic testing facilities where technicians review and analyze patient cardiac data.

According to the Justice Department, CardioNet knowingly billed federal healthcare programs—including Medicare, TRICARE, the Veterans Health Administration, and the Federal Employee Health Benefits Program—for services that were ineligible for reimbursement.

With limited exceptions, federal healthcare programs only pay for healthcare goods and services rendered in the United States.  Federal law prohibits payment for services furnished outside the United States.

CardioNet evaded this requirement by outsourcing a significant amount of its cardiac data analysis work to cardiovascular technicians located overseas, the Justice Department alleged.  Specifically, CardioNet contracted for services to be provided by TechIndia, a healthcare company located in Chennai, India.

CardioNet’s operational workflow purportedly was designed to ensure that electrocardiogram (ECG or EKG) records with respect to federal-healthcare-program patients were routed for analysis only to contractors in the United States. Those contractors, however, lacked sufficient capacity to handle CardioNet’s business, resulting in backlogs.  CardioNet thus allegedly directed a substantial portion of its federally related ECG analysis business to TechIndia. For example, in 2015, TechIndia technicians allegedly analyzed more than 47% of CardioNet’s mobile cardiac telemetry (MCT) tests and more than 88% of its cardiac-event monitoring data.

CardioNet eventually implemented controls designed to prevent its foreign cardiac-data analysis contractors from being assigned federal-healthcare-program patient ECG records. According to the Justice Department, however, those controls were insufficient, and the practice continued.

Billing for uncertified technicians

In addition to prohibiting payment for services furnished outside the United States, federal law requires that cardiovascular technicians analyzing the ECG records of federal-healthcare-program patients be appropriately trained and certified.

The Justice Department alleged that CardioNet knowingly violated this requirement in that less than three percent of the TechIndia cardiovascular technicians held the required certification. Although TechIndia had a contractual obligation to use only credentialed technicians, CardioNet for years allegedly failed to audit or otherwise confirm TechIndia’s compliance.

CardioNet also allegedly used another cardiac-data analysis firm in India, Healthwatch Telediagnostics, which allegedly did not even require that its technicians be certified before beginning work.

The False Claims Act

The False Claims Act is the federal government’s primary litigation tool for fighting civil fraud. It imposes substantial liability on parties who knowingly defraud the federal government or its agencies. Under the statute, private individuals known as whistleblowers or qui tam relators are entitled to bring lawsuits on the government’s behalf and receive 15-30% of the proceeds as a whistleblower award.

Notably, False Claims Act whistleblowers need not be American citizens or even live in the United States.

Speak to a whistleblower attorney

Fighting healthcare fraud is a top priority of the Justice Department. If you know of fraud in connection with a federal healthcare program or other fraudulent conduct harming the federal government or its agencies, it is important to speak with an experienced whistleblower lawyer. Reach out to healthcare fraud whistleblower attorney Mark A. Strauss to arrange for a free and confidential consultation.