Under the terms of the settlement AMI of McKinney, Texas, which marketed a remote cardiac monitoring device and service known as Pocket ECG, will pay a $10.6 million penalty and Medicalalgorithmics will pay a fine of $2.9 million.

The U.S. Department of Justice has settled a lawsuit with a pair of mobile healthcare companies the government alleged falsely billed Medicare.

In the settlement the government reached with AMI Monitoring Inc. and Medi-Lynx Cardiac Monitoring LLC, now owned by Medicalalgorithmics SA, the companies agreed to pay combined penalties of $13.5 million to resolve allegations of falsely billing Medicare for higher and more expensive levels of remote cardiac monitoring systems.

Under the terms of the settlement AMI of McKinney, Texas, which marketed a remote cardiac monitoring device and service known as Pocket ECG, will pay a $10.6 million penalty and Medicalalgorithmics will pay a fine of $2.9 million.

From 2011 through 2016, an AMI Monitoring subsidiary known as Spectocor and its owner, Joseph Bogdan, allegedly marketed the Pocket ECG as capable of performing three separate types of cardiac monitoring services, the government says.

When a physician sought to enroll a patient for Pocket ECG, however, the enrollment process allegedly only allowed the physician to enroll in Pocket ECG for the service which provided the highest rate of reimbursement provided by a patient’s insurance, thus steering the ordering physician to a more costly level of service, according to the U.S. Department of Justice,

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In 2013, Medi-Lynx, a related company headquartered in Plano, Texas, began selling the Pocket ECG and allegedly adopted this same enrollment procedure, the government says. The government didn’t say how much the two companies allegedly falsely billed Medicare.

Medicalgorithmics SA, a limited liability company based in Warsaw, Poland, acquired a controlling interest in Medi-Lynx in September 2016, the government says.

“Sophisticated medical technology can be used to help doctors dramatically improve the lives of their patients, but it can also be misused to fraudulently increase medical bills,” says acting U.S. Attorney William Fitzpatrick for the District of New Jersey. “Today’s settlement demonstrates that the federal government is committed to preserving the integrity of the Medicare system and ensuring that Medicare funds are spent only for patient care.”

Neither company has yet to speak publically about the fine or settlement. The government’s case began as a lawsuit filed by a former Spectocor marketing manager who will receive $2.4 million from the settlements.

The federal government has been busy in the last month settling fraud cases with companies in healthcare information technology. In May a big Massachusetts developer of electronic medical records and some company executives paid the federal government $155 million to settle a false claims lawsuit.

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The settlement was with eClinicalWorks LLC, a Westford, Mass., electronic medical records vendor with a customer base of more than 125,000 physicians and nurses and annual revenue over $440 million.

The vendor will pay the money to resolve a lawsuit filed by the federal government alleging false claims of software performance and kickbacks to customers for false product promotions.

Under the settlement, eClinicalWorks and three of the company’s top executives—CEO Girish Navani, chief medical officer Dr. Rajesh Dharampuriya, and chief operating officer Mahesh Navani—are liable to pay the federal government $154.9 million. Other company employees, including a developer and two project managers, will pay fines of $50,000 and $15,000, respectively.

 

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