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LifeWatch Services Settles False Claims Act Allegations for $18.5 Million

Earlier this year, the Department of Justice announced an $18.5 million settlement with LifeWatch Services Inc. that resolved allegations from two whistleblower lawsuits about the company’s billing for ambulatory cardiac telemetry (ACT) services.

ACT services are used to monitor cardiac activity and heart palpitations in patients.  Traditional event monitoring requires individuals to press a button when they notice a cardiac event in order to record the cardiac rhythms.  ACT services, on the other hand, are more technologically advanced and are able to automatically record cardiac events without the individual taking any action.  Because they are more advanced, ACT services are significantly more expensive than traditional event monitoring services.  Medicare reimbursed traditional monitoring services at about $250 whereas they reimbursed ACT services for anywhere between $750 and $1,200.

According to the complaints filed against LifeWatch, the company knowingly used false diagnostic billing codes to submit claims to Medicare for ACT services for patients with mild or moderate palpitations, even though these patients are not eligible to receive this type of monitoring service.  Additionally, LifeWatch was accused of offering kickbacks to hospitals and medical practices in the form of free full-time employees to induce them into submitting Medicare claims for their ACT services.

LifeWatch’s alleged fraud was uncovered by two whistleblowers and former sales representatives.  Ryan Sims, the first whistleblower, filed his qui tam lawsuit in the US District Court for the Western District of Washington in December 2009.  Sara Collins, the second whistleblower, filed her qui tam lawsuit against the company in May of 2011 in the US District Court for the Southern District of Ohio.  The two will receive about $3.4 million plus interest as their relators’ share of the settlement.

The attorneys at Tycko & Zavareei applaud Mr. Sims and Ms. Collins for taking action against LifeWatch.  By filing lawsuits against the company, these brave individuals were able to alert the government of LifeWatch’s alleged wrongful behavior and put an end to it.  If you are aware of a company committing fraud against the government, it is important that you take active steps to stop it.  For more information on what you can do, contact the experienced attorneys at Tycko & Zavareei today.

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