Semler Scientific pays $30 million to settle health care fraud claims

Semler Scientific will pay the Department of Justice nearly $30 million to settle health care fraud claims related to its peripheral artery disease test, QuantaFlo — a device used by UnitedHealth Group and other large Medicare Advantage insurers. 

The company also said that a significant customer, who accounted for nearly half of its revenue in the second quarter of 2025, is rolling back its use of QuantaFlo starting in October. Semler expects to bring in around $7 million by the end of the third quarter, and expects fourth quarter revenue to drop by 50% as a result of losing the customer.

UnitedHealth has been a major QuantaFlo user, deploying the test in its clinics and in home visits after launching a nationwide screening program in 2017. Aetna also tested patients with QuantaFlo via home health visit companies such as Signify and Matrix Medical Network. Aetna and Signify are owned by CVS Health. 

Semler Scientific, UnitedHealth, CVS Health, and Matrix Medical Network did not respond immediately to STAT’s request for comment. 

The settlement agreement, posted in an SEC filing Tuesday, revealed that a whistleblower filed a false claims act case against Semler in the Middle District of Florida in December 2016. The DOJ then took up the case, accusing Semler of submitting false claims to Medicare from 2010 to 2024. In addition to paying $29.75 million, Semler agreed to undergo surveillance by the Office of the Inspector General for five years.

How UnitedHealth turned a questionable artery-screening program into a gold mine

QuantaFlo calculates artery blood volume by measuring reflected infrared light through sensors placed on a patient’s fingers and toes. It was cleared by the Food and Drug Administration in 2015 through a pathway that requires limited clinical testing. The test is meant to aid doctors in diagnosing PAD, not to be used as a standalone diagnostic device. 

However, the DOJ claimed that Semler Scientific told customers that the QuantaFlo was reimbursable under certain codes used for the more precise ankle brachial index test, a well-established method of identifying artery disease that relies on blood pressure measurements taken at the ankle and arms. QuantaFlo is a different type of test that does not meet the same requirements and therefore should not be reimbursed at the same rate, DOJ said. 

Semler said the tests were reimbursable in written FAQs, customer and sales representative trainings, over email, and through its former distributor, Bard Peripheral Vascular Inc., according to the DOJ. 

The settlement agreement applies only to fee-for-service claims paid out by Medicare, but UnitedHealth and other insurers have broadly used the test on their Medicare Advantage beneficiaries. In Medicare Advantage, the government gives insurance companies more money to cover the cost of caring for sicker patients. Each diagnosis of peripheral artery disease, for example, nets Medicare Advantage insurers about $3,000 annually. 

The payment rules give insurers an incentive to document as many conditions as possible, and sometimes this leads to overzealous coding. Insurers’ exaggerated diagnostic coding for chronic conditions like kidney disease and substance use disorder is expected to cost taxpayers $50 billion this year, according to the Medicare Payment Advisory Commission.

Semler Scientific partnered with insurers, helping them increase revenue with its easy-to-use and highly sensitive test, and boosting its own profits considerably. Between 2018 and late 2021, the company’s market value increased from $41 million to a peak of $1 billion.

A STAT investigation last year revealed that UnitedHealth used QuantaFlo as a standalone diagnostic tool on patients at their homes and in UnitedHealth-owned clinics, dramatically boosting Medicare reimbursements. Nine clinicians told STAT that many of the diagnoses were not medically useful, either because they were false positives or because they caught asymptomatic disease, which is not usually treated. 

In the years since DOJ’s investigation and Medicare’s crackdown on reimbursements for PAD, Semler has become a “bitcoin-first” company and its mission to catch artery disease early is apparently on the backburner. 

The company is seeking a new FDA clearance to use QuantaFlo in the diagnosis of cardiovascular diseases, but reported in its filing Tuesday that the clearance won’t come until mid-to-late 2026 at the earliest. Semler is also facing a lawsuit from investors in the Northern District of California related to the timing of Semler’s disclosure of the DOJ investigation. 

UnitedHealth tallied more than 1.3 million unspecified artery disease diagnoses between 2018 and 2021, according to an analysis conducted for STAT by the Lown Institute, a nonpartisan health research organization. That means the company took in approximately $4 billion in taxpayer money from both valid and false PAD diagnoses over those four years.