Diagnostic Monitoring Services Under Increased Federal Scrutiny Following $45M Settlement

Featuring: Rebecca Stitt-Laugherty | Associate General Counsel-Regulatory


A cardiac monitoring company and its subsidiary agreed to a $44.9 million settlement with the Department of Justice (DOJ) following allegations they violated the False Claims Act (FCA) by billing federal programs for heart monitoring services that were knowingly performed outside the US. by unqualified technicians.

What Went Wrong?

In this recent example two cardiac monitoring companies, BioTelemetry and its subsidiary CardioNet, allegedly violated federal law prohibiting payment for services furnished outside the U.S. by knowingly billing for diagnostic services performed by a vendor in India.

BioTelemetry had an established workflow designed to route federal beneficiaries’ electrocardiogram (ECG) data to a U.S.-based independent diagnostic testing facility for analysis as required by federal programs, but when domestic workflows became backlogged, the ECG data was diverted to a contractor in India for analysis by technicians who didn’t meet U.S.-required qualifications.

Senior management was reportedly aware of the violation and began implementing technological controls that were ultimately insufficient to prevent unqualified India-based technicians from reviewing and analyzing ECG data for beneficiaries of federal programs.

As a result of the settlement, BioTelemetry entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services (HHS) Office of Inspector General which requires the implementation of a risk assessment and internal review process to identify and address evolving compliance risks. In addition, the CIA requires an annual independent to assess the medical necessity and appropriateness of claims billed to Medicare.

Key Takeaways

“With our law enforcement partners, our agency is extremely committed to investigating providers alleged of defying these requirements,” explained Special Agent in Charge Maureen R. Dixon of HHS. The government has made its position clear and the recent uptick in investigations demonstrates its continued emphasis on pursuing violations of federal programs.

Consider the following tips to avoid compliance risk and ensure your programs meet federal requirements:

  • Review remote diagnostic monitoring services provided by vendors to ensure patient data is managed and safeguarded in compliance with federal regulations.
  • Validate vendor credentials to prevent unqualified staff from interacting with patient data or performing services in violation of federal requirements.
  • Proactively audit workflows and data management protocols to ensure efficacy and prevent any perceptions of fraud or abuse.

As scrutiny across government healthcare programs increases, ensure your organization is taking the necessary steps to understand federal and state regulations and ensure compliance across internal and vendor-managed operations.

Rebecca Stitt-Laugherty has over 10 years of healthcare legal experience, specializing in health system operations, healthcare regulations and compliance. She currently serves as Associate General Counsel-Regulatory at Ensemble Health Partners, providing legal expertise and direction on healthcare regulatory and compliance matters.

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials.Neither Ensemble Health Partners, nor any of its employees, are your lawyers.Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.