Semler Scientific, Bard Peripheral Vascular Settle Medicare Fraud Claims

Semler Scientific Inc. and its former distributor have agreed to reimburse Uncle Sam for the money the pair allegedly pilfered from Medicare.

Semler Scientific is paying $29.75 million and its former distributor, Bard Peripheral Vascular Inc. (and its related companies), is shelling out $7.2 million to resolve Medicare fraud allegations. The duo is accused of violating the False Claims Act by submitting false Medicare claims for photoplethysmography tests performed using the FloChec and QuantaFlo devices to diagnose peripheral arterial disease (PAD).

“Medicare billing regulations are created, in part, to protect the public,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “It is incumbent upon manufacturers and their distributors to be honest with their customers about the rules and regulations that apply to their products.”

PAD in the lower extremities is characterized by the narrowing or blockage of vessels carrying blood between the heart and legs. Providers traditionally diagnose PAD by conducting a test called an ankle brachial index (ABI) to estimate the blockage’s severity in a patient’s limbs. To qualify for Medicare reimbursement, PAD testing must satisfy the requirements of Current Procedural Technology (CPT) billing codes 93922, 92923 or 93924. Each of these billing codes requires providers to conduct an ABI test plus certain additional testing. In addition, Medicare does not cover noninvasive vascular tests that use photoelectric plethysmography, also known as photoplethysmography, which uses a light sensor to detect changes in blood volume.

“Government programs expect an honest exchange between suppliers and programs funded by taxpayer dollars,” said U.S. Attorney Gregory W. Kehoe for the Middle District of Florida. “When critical information is misrepresented or skewed for profit or personal gain, the limited resources available for our healthcare system are diminished.”

From approximately 2010 through 2024, Semler manufactured, marketed, and distributed the FloChec and QuantaFlo devices to U.S. customers for diagnosing PAD. Both devices use a light sensor to detect changes in blood volume. Additionally, when the Food and Drug Administration (FDA) cleared FloChec and QuantaFlo, the agency told Semler the devices did not perform an ABI and could not be called a “digital ABI.”

The settlement resolves allegations that Semler and Bard falsely claimed that tests conducted using the FloChec and QuantaFlo devices were reimbursable by Medicare and caused healthcare providers to submit false claims to Medicare. U.S. attorneys accused Semler of knowing that testing conducted using FloChec and QuantaFlo did not satisfy CPT codes 93922, 93923, or 93924 because the devices do not perform an ABI. Additionally, prosecutors claimed that Medicare reimbursement for FloChec and QuantaFlo tests is barred because the devices use photoplethysmography. Nevertheless, Semler allegedly informed healthcare providers that Medicare reimbursed customers for tests performed using Flochec and QuantaFlo if they submitted CPT codes 93922, 93923, and 93924. Even after Semler received concerns from third parties about reimbursement, Semler allegedly continued to market the devices as reimbursable by Medicare, the U.S. government contended.

Bard served as Semler’s distributor from 2012 through 2022. As part of the settlement, Bard admitted certain allegations and received cooperation credit under Justice Department guidelines.

“Medical device companies that misrepresent the capabilities of their products and encourage providers to bill Medicare for services that do not meet coverage requirements drain critical taxpayer-funded resources,” said Acting Special Agent in Charge Isaac M. Bledsoe of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “In addition to this settlement, HHS-OIG has entered into a new five-year Corporate Integrity Agreement with Semler Scientific, which agreed to undertake substantial internal compliance measures to help ensure that the company remains appropriate and lawful moving forward.”

The five-year Corporate Integrity Agreement with the Office of Inspector General of the United States Department of Health and Human Services (HHS-OIG) obligates Semler to undertake substantial internal compliance reforms.

The allegations were originally brought in a lawsuit filed by Robert Kane and Franklin W. West under the qui tam provisions of the False Claims Act. Under the act, private parties may bring suit on the government’s behalf and share in any recovery.  Kane and West will receive approximately $6.5 million as their share of the recovery.

The settlement resulted from a coordinated effort among the Civil Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida. Senior Trial Counsel Kristen M. Echemendia, Trial Attorney Martha Glover, and Investigator Robert L. Jodoin of the Department of Justice, Civil Division, Fraud Section and Assistant U.S. Attorney Kelley Howard-Allen for the Middle District of Florida handled the matter.

The claims resolved by the settlement are allegations only. Liability has not yet been determined.