By: Christopher A. Parrella, Esq., CPC, CPCO, CHC
BioTelemetry Inc. and its subsidiary, LifeWatch Services Inc., recently faced serious allegations concerning their billing practices in the realm of remote cardiac monitoring services. This case sheds light on the crucial balance between technological advancements in healthcare and the ethical responsibilities of providers.

The two companies, BioTelemetry and LifeWatch, headquartered in Malvern, Pennsylvania, and Rosemont, Illinois, respectively, have agreed to a substantial settlement of over $14.7 million. This settlement is in response to violations of the False Claims Act, where they were accused of knowingly submitting claims to federal health care programs for a higher level of remote cardiac monitoring than was either medically necessary or intended by the prescribing physicians.

From July 1, 2014, through Dec. 31, 2020, LifeWatch allegedly marketed its ACT-3L device, capable of performing holter monitoring, event monitoring, and telemetry, with telemetry fetching the highest rate of reimbursement. It’s contended that LifeWatch’s online enrollment portal for the ACT-3L device was designed in a way that caused clinical staff to unwittingly select telemetry services, the most expensive option, even when a less expensive service was indicated. Furthermore, sales personnel from LifeWatch are accused of instructing clinical staff to choose options enrolling patients in telemetry services, despite knowing that a less costly service was intended.

This settlement highlights the Department of Justice’s ongoing commitment to upholding the integrity of federal healthcare programs. Principal Deputy Assistant Attorney General Brian M. Boynton emphasized that diagnostic companies, like other healthcare providers, are expected to bill only for medically necessary services. Such accountability is crucial in preventing the misuse of taxpayer-funded programs for personal gain.

U.S. Attorney Philip R. Sellinger for the District of New Jersey and U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania echoed these sentiments, emphasizing the importance of companies adhering to medical providers’ orders rather than opting for the most expensive services. This is not only a legal imperative but also a matter of upholding the trust and integrity of the healthcare system.

Moreover, Deputy Inspector General for Investigations Christian J. Schrank of the HHS-OIG and Special Agent in Charge Patrick J. Hegarty of the Defense Criminal Investigative Service underlined the commitment to pursuing entities that fraudulently charge federal healthcare programs.

This case also illustrates the power of the qui tam, or whistleblower provisions, under the False Claims Act. Whistleblowers Michael Pelletier and SFP I LLC played a pivotal role in bringing this case to light, ultimately leading to this significant settlement. Pelletier will receive approximately $2.3 million, and SFP I, LLC will receive about $270,000 as part of the resolution.

As healthcare defense and compliance professionals, it is our duty at Parrella Health Law to navigate these complex intersections of law, technology, and ethics. This case serves as a reminder of the importance of maintaining strict compliance with healthcare laws and regulations, ensuring that advancements in healthcare technology are used to enhance patient care, not exploit it. Our commitment at Parrella Health Law is to provide our clients with the expertise and guidance needed to navigate these challenging waters, ensuring that they uphold the highest standards of integrity and compliance.