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FOR IMMEDIATE RELEASE
Friday, March 23, 2012
United States Settles False Claims Act Allegations Against Illinois-Based Lifewatch Services

WASHINGTON - LifeWatch Services Inc., a Rosemont, Ill.-based company, has agreed to pay the United States $18.5 million to resolve allegations that the company submitted false claims to federal health care programs, the Justice Department announced today. The settlement resolves two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act.

 

The two complaints allege that LifeWatch improperly billed Medicare for ambulatory cardiac telemetry (ACT) services. ACT services are a form of cardiac event monitoring that use cell phone technology to record cardiac events in real time without patient intervention. Traditional event monitoring requires the patient to press a button when he or she notices a cardiac event to record the cardiac rhythms. Medicare reimbursed ACT services at between $750 and $1200 and traditional event monitoring services at roughly $250 during the relevant time period.

 

According to the complaints, LifeWatch was aware that ACT services were not eligible for Medicare reimbursement for patients who had experienced only mild or moderate palpitations. The complaints allege that LifeWatch nonetheless submitted claims to Medicare for ACT services for such patients using a false diagnostic code in order to have the claims paid. In addition, according to the complaints, LifeWatch improperly induced Medicare claims for monitoring services by providing valuable services in the form of full-time employees to several

hospitals and medical practices, without charge. The relators (whistleblowers) in their lawsuits alleged that these services amounted to kickbacks.

 

“False claims on federal health care programs drive up the costs of health care for all of us,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “Today’s settlement furthers the Department of Justice’s commitment to making sure that those who benefit from Medicare play by the rules.”

 

Ryan Sims, a former LifeWatch sales representative, filed a lawsuit in the U.S. District Court for the Western District of Washington in December 2009. In May 2011, Sara Collins, another former LifeWatch sales representative, filed a complaint in the U.S. District Court for the Southern District of Ohio.

 

Under provisions of the False Claims Act, individuals can bring a lawsuit on behalf of the government and receive a portion of the proceeds of any settlement or judgment that may result. Sims and Collins together will receive approximately $3.4 million plus interest as their share of the settlement proceeds.

 

“The False Claims Act is a critical tool for weeding out fraud and protecting the taxpayers,” said U.S. Attorney Jenny A. Durkan, of the Western District of Washington.  “We must ensure tax dollars go to intended programs, not to line the pockets of those who seek to cheat the programs.”

 

“The settlement underscores the need for physicians to be able to make care decisions without undue influence,” said Carter M. Stewart, U.S. Attorney for the Southern District of Ohio. “The settlement is also the result of close cooperation between our office, the Justice Department’s Civil Division and U.S. Attorney Durkan’s office.”

 

In addition to the monetary settlement, LifeWatch has entered into a comprehensive Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care benefit program requirements.

 

“The chief executive officer at LifeWatch as well as other corporate executives will be required to personally certify compliance with our five-year CIA, which includes provisions to monitor LifeWatch’s claim submission process, sales force activities and relationships with some types of business referrals,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “LifeWatch allegedly tried to boost profits at taxpayer expense, and, ultimately, paid $18.5 million back to the government.”

 

The claims resolved by the settlement are only alleg ations and do not constitute a determination of liability.

 

In addition to the efforts of attorneys from the U.S. Attorney’s Offices for the Western District of Washington and Southern District of Ohio and the Commercial Litigation Branch of the Civil Division of the Department of Justice in Washington, D.C., investigators from the Office of Inspector General of the Department of Health and Human Services, Defense Criminal Investigative Service and Office of Inspector General for the Office of Personnel Management assisted the government’s investigation of the whistleblowers’ allegations.

 

This resolution is part of the government's emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $8.9 billion.

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