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Effective September 10, 2025, Semler Scientific, Inc., or Semler Sci, entered into a settlement agreement with the Civil Fraud Section of the U.S. Department of Justice, or DOJ, the U.S. Department of Health and Human Services, or HHS, and certain relators to settle all potential claims related to alleged civil violations of the False Claims Act pertaining to submissions of allegedly false claims to Medicare Part B for tests performed using the FloChec and QuantaFlo devices. Pursuant to the settlement agreement, Semler Sci agreed, among other things, to pay a settlement amount of $29.75 million, and interest at a rate of 4.25% per annum from April 28, 2025 on such amount, within 14 business days, $5.2 million of which, plus 17.5% of the interest amount, will be paid by the United States to the relators. In addition, Semler Sci agreed to pay $390,000 for attorneys' fees and costs to relators' counsel within seven business days. Upon receipt of the settlement amount, and subject to certain exceptions, Semler Sci is released from any civil or administrative monetary claims for the covered conduct. By entering into the settlement agreement, Semler Sci did not admit any wrongdoing in connection with the allegations raised. Semler Sci currently intends to use cash from operations, along with proceeds from the sale of securities under its at-the-market, or ATM, equity offering program, and may also borrow under its previously disclosed Master Loan Agreement with Coinbase Credit Inc. as lender, and Coinbase Inc., together the Coinbase entities, to pay such amounts.
In connection with the entry into the settlement agreement, Semler Sci also entered into a corporate integrity agreement with the Office of Inspector General, or OIG, of HHS whereby it agreed to institute certain compliance and other measures relating to its sales practices, and provide reporting to OIG for a five year period.
Business Operations Update; Revenue Guidance
Semler Sci previously reported that it is experiencing and expects to continue to experience decreased usage of its QuantaFlo device due to the 2024 Medicare Advantage and Part D Final Rate Announcement issued by the Centers for Medicare and Medicaid Services, or CMS. While revenues have been gradually decreasing period over period in light of the CMS reimbursement landscape and are expected to be in the range of $6.9-$7.5 million in the third quarter 2025, a significant customer (who together with its affiliates accounted for 44.9% of second quarter 2025 revenue) recently notified Semler Sci that it, together with its affiliated entities, expected to significantly reduce use of QuantaFlo devices effective October 1, 2025. Accordingly, Semler Sci currently anticipates fourth quarter 2025 revenues will be at least 50% lower as compared to third quarter 2025 expected revenue. Further, while Semler Sci is currently seeking a new 510(k) clearance from the U.S. Food and Drug Administration, or FDA, for expanded labeling of QuantaFlo, which is intended as an aid in the diagnosis of other cardiovascular diseases, and is actively engaged in responding to requests from additional information in support of clearance, the new 510(k) clearance is not expected until mid- to late 2026 at the earliest.
Posted In: SMLR
