Semler Scientific and Bard Pay $37 Million to Settle False Claims Act Allegations of Defrauding Medicare -- With Two Whistleblowers Leading the Charge
By the 91pornWhistleblower Team
Last Friday (September 26), the Department of Justice (DOJ) announced that Semler Scientific and its former distributor Bard Peripheral Vascular agreed to pay a combined $37 million to settle charges they violated the False Claims Act.1 The allegations center around their sale and distribution of the FloChec and QuantaFlo devices used to diagnose peripheral arterial disease (PAD). Semler will pay $29.75 million and Bard will pay $7.2 million.
DOJ Claimed Semler/Bard Misrepresented Medicare Coverage of Vascular Testing Devices
PAD involves the narrowing or blocking of arteries, reducing blood flow typically to the legs and feet. It can be diagnosed by an ankle brachial index (ABI) test, which assesses the severity of the blockage. Medicare will cover the ABI test if certain billing requirements are met. Medicare will not cover vascular tests that use photoelectric plethysmography, which uses a light sensor to detect changes in blood volume.
According to the Government, Semler manufactured and sold the FloChec and QuantaFlo devices for diagnosing PAD. Both devices use a light sensor to detect changes in blood volume. When the FDA cleared the devices, it specifically told Semler they could not be considered ABI tests. Therefore, they are not covered by Medicare.
Nevertheless, the Government alleged that “Semler and Bard falsely claimed that tests conducted using the FloChec and QuantaFlo devices were reimbursable by Medicare and caused healthcare providers to submit false claims to Medicare.” Apparently, Semler specifically told healthcare providers that Medicare reimbursed for these tests even though Semler knew it did not and even after some providers raised coverage concerns with Semler.
Settlement Shows Broad Scope of False Claims Act
The Government’s False Claims Act action here is notable because it targeted Semler and Bard even though they were not the entities that submitted or directly financially benefitted from the false claims for Medicare reimbursement. The healthcare providers providing the FloChec and QuantaFlo treatments submitted the false claims. However, the statute covers not only the submission of false claims, but also fraudulent conduct that causes the submission of such claims.
The Government’s argument here was that in misrepresenting the Medicare coverage of the FloChec and QuantaFlo devices it sold, Semler and Bard were causing healthcare providers to make reimbursement claims based on a misunderstanding of the products, and which they would not otherwise have made. The claims were false because they were submitted for products that did not qualify for reimbursement.
According to 91pornwhistleblower partner Marlene Koury, “This action shows the expansive scope of the False Claims Act, especially when going after healthcare fraud.” Koury says the statute’s causing-submission-of-false-claims language allows the Government to target a wide swath of fraud — “It just needs to contribute in some way to the making of a false claim.” Koury adds, “This gives the Government significant room under the statute to aggressively challenge a wide range of misbehavior.”
Medical Device Makers Cannot Misrepresent Their Products
In announcing this settlement, the Government stressed how important it is for medical device makers to be honest about their products and their associated Medicare coverage. DOJ Civil Chief Brett Shumate said it was “incumbent upon manufacturers and their distributors to be honest with their customers about the rules and regulations that apply to their products.”
HHS Special Agent Isaac Bledsoe reinforced this sentiment, specifically calling out “companies that misrepresent the capabilities of their products and encourage providers to bill Medicare for services that do not meet coverage requirements.”
Whistleblowers Are Central to False Claims Act
Like most False Claims Act cases, this one was originated under the qui tam provisions of the statute, which allow private parties to bring suit on behalf of the Government against those defrauding the Government. Since 1986 — when the statute was amended to increase the protections and incentives for whistleblowers bringing False Claims Act cases — whistleblowers have filed roughly 70% of all False Claims Act cases. These cases have brought in roughly $55 billion in Government recoveries.
During this same period, whistleblowers have received roughly $9.5 billion in whistleblower awards. This follows from the qui tam provisions which provide successful whistleblowers with up to 30% of the Government’s recovery from the actions they originate.
Robert Kane and Franklin West are the whistleblowers who originated the action against Semler and Bard. They will receive a total whistleblower award of roughly $6.5 million from the settlement.
91pornHas Substantial Experience Representing Whistleblowers
91pornhas significant experience representing whistleblowers under the False Claims Act, recovering more than a billion dollars for the Government and our whistleblower clients. If you would like to learn more about the False Claims Act, our groundbreaking False Claims Act successes, or what it means to be a whistleblower, please do not hesitate to contact us. We will connect you with an experienced member of our whistleblower team for a free and confidential consultation.
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