A New Jersey company that remotely monitors cardiac devices implanted in heart patients has agreed to pay the U.S. $1.35 million to settle allegations it paid kickbacks to doctors to coax them to use its services.
Mednet Healthcare Technologies entered into “fee-for-service” or “direct-bill” agreements with certain hospital and physician customers. MedNet charged a fee to the customers for cardiac monitoring services.
But the company allegedly allowed the customers to bill Medicare directly for these same services and retain the reimbursements they received, which exceeded the fee that MedNet charged. This scheme, which lasted from March 2006 to January 2004, effectively enabled all parties to cheat Medicare for profits.
“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 Office of Paul Fishman, U.S. Attorney for the District of New Jersey, said in a statement. “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 Statute. As a result, MedNet caused the submission of false claims for cardiac monitoring services to Medicare.
The allegations settled by the Nov. 15 agreement stemmed from a lawsuit filed by a whistleblower under the U.S. False Claims Act, which allows private parties to sue on behalf of the government in cases of suspected fraud and other wrongdoing targeting taxpayer-funded federal agencies or programs. Whistleblowers whose complaints lead to a recovery are awarded up to 25 percent of the total amount recovered and up to 30 percent if the government chose not to participate in the litigation.