By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, MA
A Health Care Provider Defense and Compliance Firm

On September 17, 2025, the Department of Justice announced a nearly $30 million settlement with Semler Scientific, the maker of the peripheral artery disease device QuantaFlo. The settlement resolves allegations that Semler marketed the test as reimbursable under codes reserved for the more rigorous ankle-brachial index test.

While Semler has taken the hit including five years of mandatory Office of Inspector General oversight and the loss of a major customer accounting for nearly half its revenue,the case is widely viewed as part of DOJ’s larger strategy: building pressure on downstream players to eventually target the real prize, UnitedHealth Group and its Medicare Advantage risk-adjustment practices.

Background

• Semler Scientific developed QuantaFlo, an infrared sensor test cleared by FDA in 2015 with limited clinical testing requirements.
• Starting in 2017, UnitedHealth rolled out a nationwide screening program using QuantaFlo in home visits and clinics, generating diagnoses of peripheral artery disease (PAD) that netted the insurer approximately $3,000 per patient annually in Medicare Advantage risk-adjustment payments.
• Independent analysis shows UnitedHealth reported over 1.3 million PAD diagnoses from 2018 to 2021, leading to an estimated $4 billion in additional taxpayer funded reimbursements.
• DOJ alleged that Semler encouraged insurers and providers to bill QuantaFlo under codes that did not apply, inflating claims submitted to Medicare.
• The settlement only covers fee-for-service claims, but Medicare Advantage payers, including UnitedHealth and Aetna/Signify widely adopted the test in their risk-adjustment strategies.

This is part of a broader crackdown. DOJ, CMS, and MedPAC have all flagged exaggerated coding in Medicare Advantage, with taxpayer costs estimated at $50 billion annually.

What This Means for Providers

This settlement is not just about a single device it is about risk adjustment as a business model. Providers who partner with Medicare Advantage insurers, labs, or device makers should expect increased scrutiny of:

• Diagnostic tools and screening programs used to generate risk-adjustment codes.
• Incentive structures tied to patient diagnoses or participation.
• Coding practices that may appear to stretch clinical justification.

Even if your organization had no role in selecting a tool like QuantaFlo, being part of the chain for example, conducting home visits or providing contracted services can expose you to audit demands, clawbacks, or subpoenas as DOJ builds its case against larger insurers.

Parrella Health Law Call to Action

If you are a provider working with Medicare Advantage plans or downstream contractors, now is the time to review your risk-adjustment coding, vendor relationships, and incentive programs. Federal enforcement actions are ramping up, and DOJ is making clear that downstream entities will be leveraged to get to the top of the chain. Parrella Health Law represents providers facing payer audits, fraud investigations, and compliance risks tied to Medicare Advantage operations.

Contact Parrella Health Law at 857.328.0382 or reach Chris directly at cparrella@parrellahealthlaw.com for strategic guidance on protecting your practice.