Semler Scientific & Bard to Pay Nearly $37 Million Over False Claims Allegations

Key Takeaways

• Settlement Amount: Semler will pay $29.75 million, and Bard $7.2 million, totaling nearly $37 million.
• Misrepresentation: Prosecutors said the companies marketed devices as qualifying for Medicare reimbursement despite knowing they didn’t.
• FDA Warnings: Regulators had told Semler the devices could not be marketed as performing an ankle brachial index (ABI).
• Compliance Overhaul: Semler must operate under a five-year Corporate Integrity Agreement with HHS-OIG.
• Whistleblower Reward: The two relators in the case will split roughly $6.5 million.

Deep Dive

Two medical device companies are paying a steep price after federal prosecutors accused them of pushing products in ways that misled doctors and drained taxpayer-funded healthcare programs.

Semler Scientific Inc. has agreed to pay $29.75 million, and Bard Peripheral Vascular Inc. and related entities will pay $7.2 million, resolving False Claims Act allegations tied to Medicare reimbursements for the FloChec and QuantaFlo devices.

At issue were tests for peripheral arterial disease (PAD), a serious condition that restricts blood flow to the legs. Medicare requires that providers use an ankle brachial index (ABI) test, alongside additional clinical methods, to qualify for reimbursement.

Semler’s FloChec and QuantaFlo devices instead use photoplethysmography, a light sensor that tracks blood volume changes. The Food and Drug Administration had told Semler years ago that the devices were not ABI tests and could not be marketed as such. Yet prosecutors allege the company continued to encourage doctors to bill Medicare using CPT codes reserved for ABI-based tests.

PAD can be life-threatening, and Medicare’s rules were designed to ensure accurate diagnosis and proper billing. According to the government, Semler blurred those lines, representing the devices as reimbursable when they weren’t.

Prosecutors Speak Out

Justice Department officials emphasized that misrepresentation in healthcare is more than a billing mistake, it undermines trust in taxpayer-funded programs.

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

U.S. Attorney Gregory W. Kehoe in Florida was more blunt, “When critical information is misrepresented or skewed for profit or personal gain, the limited resources available for our healthcare system are diminished.”

Fallout and Compliance Overhaul

Beyond writing a large check, Semler also entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General. The deal obligates the company to implement significant internal compliance reforms, a move officials say is meant to prevent this kind of conduct from happening again.

Bard, which distributed the devices between 2012 and 2022, admitted certain allegations but also earned cooperation credit under Justice Department guidelines, reducing its exposure.

The case began with two insiders, Robert Kane and Franklin W. West, who filed a whistleblower complaint under the False Claims Act’s qui tam provisions. For their role, they’ll receive about $6.5 million from the settlement, a reminder that whistleblowers often play a central role in exposing fraud.

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