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Friday
Jul142017

Whistleblower collects $2.4 million from cardiac monitoring settlements

Image courtesy of cardiacmonitoring.comThe former sales manager at a company that provides cardiac monitoring services earned $2.4 from a false claiims settlement by his ex-employer.

Eben Steele, formerly of AMI Monitoring Inc. (aka Spectocor), filed a federal lawsuit in Newark, New Jersey in March 2014 under the qui tam or whistleblower provisions of the False Claims Act.

He alleged that Spectocor and its owner, Joseph Bogdan, violated the False Claims Act by billing Medicare for higher and more expensive levels of cardiac monitoring services than requested by the ordering physicians. The suit also named Medi-Lynx Cardiac Monitoring LLC, and its majority owner, Medicalgorithmics SA.

Spectocor and Bogdan agreed to pay $10.56 million to resolve the allegations. Two other companies that sold Spectocor's services, Medi-Lynx and Medicalgorithmics, agreed to pay $2.89 million.

The False Claims Act allows private individuals to sue on behalf of the government for false claims and to share in any recovery.

The FCA allows the government to intervene and take over the action, as it did in this case.

Steele's share of the settlement is about $2.4 million, the DOJ said Monday.

His lawyers were Suzanne Durrell and Robert Thomas of the Whistleblower Law Collaborative.

In a statement released by his lawyers, Steele said: "I was offended by this underhanded scheme. Not only was it overriding the doctor's judgment about what the patient needed, but it was lining the Defendants' pockets at the expense of the taxpayer."

The complaint alleged that from 2011 through 2016, Spectocor, headquartered in McKinney, Texas, and Joseph Bogdan, marketed the Pocket ECG as capable of performing three separate types of cardiac monitoring services—holter, event, and telemetry.

Whenever doctors tried to enroll patients for Pocket ECG, the enrollment defaulted to the most expensive level of service.

In 2013, Medi-Lynx, a related company headquartered in Plano, Texas, began selling the Pocket ECG and allegedly adopted this same enrollment procedure.

Medicalgorithmics SA, a limited liability company based in Warsaw, Poland, acquired a controlling interest in Medi-Lynx in September 2016.

The case was United States ex rel. John Doe v. Spectocor Enterprise Services, LLC, et al., Case No. 14-1387 (KSH) (D. N.J.).

The DOJ said the claims resolved by the settlements "are allegations only and there has been no determination of liability."

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

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