In The News

Several Cardiac Monitoring Companies Have Agreed to Pay $13.45 Million to Resolve False Claims Act Allegations

The Department of Justice announced last month that AMI Monitoring Inc., its owner Joseph Bogdan, Medi-Lynx Cardiac Monitoring LLC., and Medicalgorithmics SA, have all agreed to resolve allegations that they violated the False Claims Act. AMI Monitoring Inc., also known as Spectocor, and Bogdan have agreed to pay $10.56 million, and Medi-Lynx and Medicalgorithmics have agreed to pay $2.89 million. “Independent diagnostic testing facilities that improperly steer physicians to order higher levels of service will be held accountable,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will vigilantly ensure the appropriate use of our country’s limited Medicare funds.”


The government says that the companies intentionally guided patients towards more expensive levels of cardiac monitoring services than were medically necessary. Specifically, from 2011 to 2016 Spectocor, marketed a pocket ECG machine capable of several kinds of cardiac monitoring – holter, event, and telemetry. However, during the enrollment process for the cardiographic services, physicians were only able to choose the service that allowed for the highest rate of reimbursement from Medicare. Medicalgorithmics SA acquired a controlling interest in Medi-Lynx in September 2016.


“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,” said Acting U.S. Attorney William E. 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.” Eben Steele, a former sales manager at Spectocor, filed the original lawsuit in a federal court in Newark, New Jersey that resulted in last month’s multi-million dollar settlement. Mr. Steele was able to file his suit under the qui tam or whistleblower provisions of the False Claims Act. This Act allows private citizens to sue on behalf of the federal government in cases involving false claims and to share in any subsequent recovery. Mr. Steele’s share of the settlements amounts to $2.4 million.


The government’s intervention in this matter is a part of its ongoing efforts to investigate healthcare fraud. This initiative began during the previous administration.   Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).