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Whistle-blowers nab employer for $18.5 million in false claims

In a settlement of two whistle-blower lawsuits, LifeWatch Services, Inc. will pay $18.5 million on claims that it engaged in a practice of presenting false claims for payment through federal medical programs. The company, which provides medical diagnostic testing services in Wisconsin and elsewhere, did not admit blame in reaching the settlement.

The settlement was announced on March 23 by the U.S. Department of Justice. Both lawsuits were filed under the federal False Claims Act, which provides for the recovery of sums improperly paid out by the federal government on falsified or fraudulent claims.

Both of the lawsuits asserted that the company made false claims to Medicare to pay for ambulatory cardiac telemetry services. Patients who only suffered mild or moderate palpitations were not eligible to have such services paid for by Medicare. The lawsuits argued that the company knew this but still submitted claims for payment to Medicare; the company received improper payments as a result. The company also allegedly covered up its improper billing by using a false diagnostic code, disguising the true nature of which services were provided.

LifeWatch is further accused of providing what amounted to kickbacks to medical practices and hospitals by giving them full time employees to work there without charge, hoping to receive patient referrals for diagnostic testing.

The lawsuits were filed by whistle-blowers who previously worked for the company as sales representatives. The false claims law encourages whistle blowing by awarding a whistle-blower a percentage of the money recovered by the federal government. In this case, the two former employees will receive approximately $3.4 million, before interest.

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Alan Olson writes this web-log to provide helpful information regarding employment law cases. He practices employment law throughout the United States from his offices in New Berlin, Wisconsin. Attorney Olson may be contacted at [email protected] with questions about the information posted here or for advice on whistleblower claims.

Source: Business Insurance, "LifeWatch settles whistle-blower suits for $18.5 million: Justice Department," Judy Greenwald, March 23, 2012

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