WASHINGTON, D.C. — Two medical device companies — Semler Scientific Inc. and Bard Peripheral Vascular Inc. — will pay a combined $36.95 million to resolve allegations they violated the False Claims Act by causing healthcare providers to submit false Medicare claims for vascular tests using devices that were not eligible for reimbursement.
The U.S. Department of Justice announced that Semler will pay $29.75 million, while Bard and its affiliates, which acted as a distributor for Semler from 2012 to 2022, will pay an additional $7.2 million. The companies allegedly misled medical providers into believing that tests using their FloChec and QuantaFlo devices were billable under specific Medicare codes — despite knowing the devices did not meet the criteria for coverage.
Devices Misrepresented as Medicare-Reimbursable
At the heart of the case is the diagnosis of Peripheral Arterial Disease (PAD) — a condition involving the narrowing of arteries in the legs. Medicare requires that PAD testing must include a procedure known as the ankle-brachial index (ABI) to qualify for reimbursement under billing codes 93922, 93923, or 93924.
But the DOJ alleges that the FloChec and QuantaFlo devices — which rely on photoplethysmography (PPG), a light-based method for measuring blood volume changes — did not perform ABI tests and therefore were not eligible under those codes. Furthermore, Medicare does not reimburse PPG-based tests for PAD diagnosis.
“It is incumbent upon manufacturers and their distributors to be honest with their customers about the rules and regulations that apply to their products,” said Brett A. Shumate, Assistant Attorney General of the Justice Department’s Civil Division.
Despite FDA warnings that the devices could not be marketed as digital ABI tools, Semler allegedly promoted them as reimbursable and continued doing so even after receiving warnings and concerns from third parties.
Corporate Integrity Agreement Imposed
As part of the resolution, Semler has agreed to a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), requiring the company to implement internal compliance reforms and undergo regular audits.
“Companies that misrepresent their products and encourage improper Medicare billing divert critical taxpayer-funded resources,” said Isaac M. Bledsoe, Acting Special Agent in Charge at HHS-OIG.
The case originated from a whistleblower lawsuit filed under the False Claims Act’s qui tam provision by Robert Kane and Franklin W. West, who brought the companies’ conduct to light. As a reward, they will share $6.5 million from the settlement.
Bard, which served as Semler’s exclusive distributor for a decade, admitted to certain allegations and received cooperation credit from the Justice Department for assisting in the investigation. While the settlement resolves the allegations, the DOJ noted that no determination of liability has been made in court
Bard Settlement US ex. rel Kane v. Semler Scientific Inc. et al..pdf
