Medtech company Semler Scientific has announced an offer to pay nearly $30 million to the Justice Department to resolve allegations related to how Medicare and other federal healthcare programs were billed for peripheral artery disease tests conducted using its QuantaFlo device.
The Justice Department has not responded to the offer. If it’s rejected, the agency could proceed with a civil lawsuit under the False Claims Act, which could result in the company having to pay more. If that's the case, Semler Scientific said in a statement that it will vigorously defend itself. The Justice Department has not released any information about the basis for the allegations.
Related: Elevance seeks to calm investors after UnitedHealth miss
QuantaFlo uses an infrared sensor to test patients for peripheral arterial disease and generates results in under three minutes. An ankle-brachial test, which is commonly used to assess a patient for peripheral arterial disease, takes about 10 to 15 minutes to perform, according to WebMD.
Semler Scientific’s two biggest customers are UnitedHealth Group and Signify Health, which is owned by CVS Health. UnitedHealth alone logged more than 1.3 million unspecified artery disease diagnoses from 2018 to 2021, according to a Lown Institute analysis of Medicare data for STAT. As a result, the insurance provider received about $4 billion in Medicare payments.
Semler Scientific expects to report about $9 million in revenue for the first quarter and a loss of between $1.3 million and $1.5 million, driven in part by legal expenses from the Justice Department investigation, according to its 8-K filing on Tuesday. In 2024, the company reported net income of $40.9 million on revenue of $56.3 million.
