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Cardiac Monitoring Company Paid Illegal Kickbacks to Physicians

MedNet Inc., a Ewing, New Jersey-based remote cardiac monitoring company and a subsidiary if BioTelemetry Inc., has agreed to pay more than $1.35 million to resolve allegations that it paid kickbacks to induce physicians to use the company’s cardiac monitoring services.

According to the settlement agreement:

From March 15, 2006, through Jan. 31, 2014, before BioTelemetry acquired MedNet, MedNet entered into “fee-for-service” or “direct-bill” agreements with certain hospital and physical clinic customers. MedNet charged a fee to the customers for certain services that the company performed in connection with event monitoring and telemetry, two types of cardiac monitoring services. MedNet allowed the customers to bill Medicare directly for these same services and retain the reimbursements they received from Medicare, which exceeded the fee that MedNet charged them.

These agreements resulted in a net profit to MedNet’s customers who submitted claims to Medicare in accordance with the agreements, primarily for services that MedNet – and not the customers – performed. The government contends that MedNet entered these agreements and provided this remuneration to these customers in order to induce referrals from those customers for MedNet’s services.

The government alleges that the remuneration MedNet provided in connection with the agreements was illegal remuneration under the Anti-Kickback Stature. As a result, MedNet caused false claims to be submitted to Medicare for cardiac monitoring services provided to patients of its customers.

The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.