$37 Million FCA Settlement: Semler Scientific and Bard Resolve Medicare False Claims Over FloChec/QuantaFlo

$37 Million FCA Settlement: Semler Scientific and Bard Resolve Medicare False Claims Over FloChec/QuantaFlo

On September 26, the US Department of Justice (DOJ) announced that Semler Scientific Inc., Bard Peripheral Vascular Inc., and affiliated companies agreed to pay nearly $37 million to resolve allegations that they violated the False Claims Act (FCA) by causing the submission of false claims to Medicare for diagnostic tests using FloChec and QuantaFlo devices. These devices, which use photoplethysmography, do not meet Medicare coverage requirements for peripheral arterial disease testing.

The DOJ alleged that, despite knowing that the devices did not meet Medicare’s requirements and that reimbursement for photoplethysmography tests was barred, Semler represented to health care providers that Medicare would reimburse tests performed with these devices if submitted under the relevant billing codes. The settlement includes a five-year Corporate Integrity Agreement for Semler, requiring enhanced compliance measures. The case originated from a whistleblower lawsuit, with the whistleblowers receiving approximately $6.5 million from the recovery.

The DOJ’s press release can be found here.

DOJ Moves to Dismiss FCA Case After Expert’s Report Contaminated by GenAI “Hallucinations”

On September 30, a Utah federal district court dismissed a five-year FCA qui tam action against Mountain West Anesthesia LLC after the DOJ exercised its authority, pursuant to 31 U.S.C. § 3730(c)(2)(A), to intervene and move to dismiss the relator’s claims, despite having previously declined to intervene. The dismissal followed revelations that the relator’s medical billing expert relied on generative artificial intelligence (GenAI), fabricated citations, fake government testimony, and nonexistent publications in an expert report. US District Judge Tena Campbell granted the DOJ’s motion, which was unopposed, and dismissed the case.

The DOJ’s motion and the court’s order do not refer to falsehoods referenced in the expert report. However, the DOJ asserted that “continued litigation of this qui tam action is not in the government’s interests.”

Georgia Tech Research Corporation Settles DOJ Cyber-Fraud Allegations for $875,000

The DOJ announced on September 30 that Georgia Tech Research Corporation (GTRC) will pay $875,000 to resolve allegations it violated the FCA and federal common law by failing to meet US Department of Defense (DoD) cybersecurity requirements in connection with certain Air Force and Defense Advanced Research Projects Agency requirements.

According to the government, until December 2021, GTRC and Georgia Tech failed to install, update, or run anti-virus/anti-malware tools on desktops, laptops, servers, and networks at the Astrolavos Lab while performing sensitive cyber-defense research for DoD. Further, the government alleged that until at least February 2020, there was no system security plan in place for the Astrolavos Lab outlining required cybersecurity controls. Finally, in December 2020, the government alleged that GTRC submitted a summary-level cybersecurity assessment score to DoD of 98 that was allegedly false because: 

1. There was no campus-wide IT system to which the score could apply. 

2. The score was based on a “fictitious” or “virtual” environment rather than an actual covered contracting system processing, storing, or transmitting covered defense information.

The case was originally brought by former members of Georgia Tech’s Cybersecurity Team under the qui tam provisions of the FCA. The settlement provides for the relators to receive $201,250 in recovery.

The DOJ’s press release can be found here.