Medical Device Company Semler Scientific and its former distributor Bard Peripheral Vascular Inc. recently reached a $37 million settlement with DOJ to resolve allegations raised by two whistleblowers that they violated the False Claims Act (FCA). Of the almost $37 million settlement, Semler will pay $29.7 million and Bard will pay $7.2 million.
The qui tam complaint alleges that for the 14-year period between 2010 and 2024, Semler violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part B for the submission of photoplethysmography tests performed using its FloChec and QuantiFlo devices in connection with the diagnosis of Peripheral Arterial Disease (PAD). To qualify for Medicare reimbursement, PAD devices must be able to perform an ankle brachial index to estimate the blockage in a patients’ limbs, which the FloChec and QuantiFlo devices could not perform, and may not use photoplethysmography, the technology the Semler devices employ.
Despite these requirements, Semler allegedly represented to healthcare providers that Medicare reimbursed customers for the photoplethysmography tests their FloChec and QuantiFlo devices provided and continued to do so in the face of concerns raised by third parties about the eligibility of the tests for reimbursement.
The lawsuit was initiated by two whistleblowers Robert Kane and Franklin West who are vascular diagnostics industry experts. Kane and West will receive $6.5 million as their share of the recovery. Semler also agreed to a five-year corporate integrity agreement with the Department of Health and Human Services’ Office of the Inspector General, requiring internal compliance reforms at the company.
However, a significant part of Kane and West’s qui tam lawsuit remains. It includes allegations against UnitedHealth Group and United Health Insurance Company for submitting false claims to Medicare Part C for PAD diagnoses made using Semler Scientific’s Quantiflo device that falsely inflated the beneficiaries’ risk scores and led to improperly increased Medicare reimbursement. In September, the Justice Department declined to intervene in that portion of the case, and the whistleblowers are proceeding with those allegations on their own.
Unfortunately, the Semler Scientific and Bard settlements are not an isolated case but instead are part of a recent surge in False Claims Act cases alleging fraud in the world of diagnosing and treating PAD. In 2024, National Interventional Radiology Partners (NIRP) and its CEO agreed to pay $9 million for allegedly paying physicians for referrals to clinics established to surgically treat patients with PAD. In 2023, the U.S. joined a qui tam whistleblower’s FCA case against Pennsylvania radiologist Dr. James McGuckin for allegedly billing Medicare and FEHBP for medically unnecessary invasive peripheral artery procedures in patients’ legs.
Adding more scrutiny in this area, in two recent work plans projected to be completed in 2025 and 2026, respectively, HHS OIG has noted that peripheral vascular procedures in office settings and peripheral vascular surgeries are vulnerable to improper payments and has announced that it is in the process of analyzing Medicare fee-for-service for peripheral vascular procedures, including surgeries in peripheral arteries, for questionable characteristics and will assess whether these procedures complied with CMS requirements and met applicable treatment guidelines.
Listen to Mary Inman and Monitor Mondays host, Chuck Buck, discuss the settlement in the latest episode of the Monitor Monday Podcast.
