Two major medical companies have agreed to pay millions after being accused of misleading healthcare providers and causing false claims to be submitted to Medicare.
Federal officials announced that Semler Scientific Inc. will pay $29.75 million, while its former distributor Bard Peripheral Vascular Inc. and related companies will pay $7.2 million to settle the allegations.
The claims centered on how their devices, FloChec and QuantaFlo, were marketed and billed for use in diagnosing peripheral arterial disease (PAD) — despite not meeting Medicare’s strict requirements.
Why the Government Stepped In
Federal officials stressed that Medicare billing rules exist to protect taxpayer funds and ensure fair use of healthcare resources.
Assistant Attorney General Brett A. Shumate explained it simply: manufacturers and distributors must be honest about what their devices can and cannot do. U.S. Attorney Gregory W. Kehoe echoed that, saying when companies distort information for profit, the healthcare system loses vital resources.
Investigators from the Department of Health and Human Services (HHS) went further, pointing out that misrepresenting devices to providers not only drains taxpayer money but also risks patient care.
How the Devices Were Marketed
The devices at the heart of the case — FloChec and QuantaFlo — measure blood volume changes with light sensors, a process called photoplethysmography.
While the FDA cleared them for use, the agency explicitly told Semler that they could not be marketed as a digital version of the gold-standard ankle brachial index (ABI) test.
Medicare rules are clear: PAD testing is only reimbursed if it involves an ABI test along with specific additional requirements.
Medicare does not cover tests using photoplethysmography.
Still, according to the allegations, Semler continued to market these devices as eligible for reimbursement — even after concerns were raised by third parties.
Bard’s Role and Admission
Bard, which served as Semler’s distributor for a decade, admitted certain allegations as part of the settlement.
Because of its cooperation with investigators, Bard received some credit in the final agreement.
New Compliance Agreement for Semler
Beyond paying nearly $30 million, Semler has also entered into a five-year Corporate Integrity Agreement with HHS.
This deal requires the company to make significant internal reforms to ensure its future practices remain lawful and transparent.
Whistleblowers Step Forward
This case only came to light thanks to a qui tam lawsuit filed by whistleblowers Robert Kane and Franklin W. West.
Under the False Claims Act, private individuals can sue on behalf of the government and receive part of the settlement.
Kane and West will share approximately $6.5 million for their role in exposing the fraud.
The Bigger Picture
Federal officials highlighted this case as part of a broader effort to crack down on healthcare fraud.
The public is encouraged to report any suspicious activity or misuse of government programs to HHS at 800-HHS-TIPS (800-447-8477).
It’s worth noting that while this settlement resolves the claims, the companies did not admit liability, and no court determined wrongdoing.