8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

June 25, 2001
(Date of Report; Date of Earliest Event Reported)

Raytel Medical Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

000-27186 (Commission File Number)	942787342 (IRS Employer Identification No.)
2755 Campus Drive, San Mateo, California (address of principal executive offices)	94403 (Zip Code)

(650) 349-0800
(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

	ITEM 5. Other Events.
	ITEM 7. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1

ITEM 5. Other Events.

      Raytel Cardiac Services, Inc., a wholly-owned subsidiary of the registrant, has reached agreement with the federal government to end an investigation into its pacemaker operations and Medicare billing practices. In return for the federal government ceasing any further investigation into its pacemaker operations and any additional potential criminal charges, the subsidiary pleaded guilty on June 25, 2001 in U.S. District Court in Hartford Connecticut to a charge of obstructing a criminal investigation arising out of the initial investigation in June 2000. In addition, the registrant and Raytel Cardiac Services have reached an agreement in principle with the government to settle civil claims relating to this matter. Under the criminal and civil settlements, the subsidiary would pay a total of $11.5 million to the government over a five year period and enter into a Corporate Integrity Agreement. Other product lines offered by the subsidiary have not been under investigation and are not affected by this agreement. The Registrant will guarantee a portion of the payment owed by its subsidiary associated with the agreement.

      A copy of the press release announcing the settlement is attached as Exhibit 99.1 and is incorporated herein by reference.

ITEM 7. Financial Statements and Exhibits.

(a)	Financial statements of business acquired:
	Not applicable.
(b)	Pro forma financial information:
	Not applicable.
(c)	Exhibits:

Exhibit No.	Description
99.1	Press Release dated June 25, 2001.

-2-

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RAYTEL MEDICAL CORPORATION
Date: June 27, 2001	By:	/s/ Richard F. Bader
		Richard F. Bader President and Chief Executive Officer

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EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
99.1	Press Release dated June 25, 2001

-4- EX-99.1 2 f73761ex99-1.txt EXHIBIT 99.1 1 CONTACT: Jason Sholder, President and CEO (800) 367-1095 RAYTEL ANNOUNCES CONCLUSION OF GOVERNMENT INVESTIGATION June 25, 2001 --- Raytel Cardiac Services, Inc. (RCS), a subsidiary of Raytel Medical Corporation (Nasdaq:RTEL), announced today that it has reached agreement with the federal government which will result in the conclusion of the government's investigation of the company. RCS has pleaded guilty and has been sentenced today in U.S. District Court in Hartford, Connecticut to a charge of obstructing a criminal investigation arising out of the initial investigation reported by the Company in June of 2000. In a plea agreement with the U.S. Attorney's office in Connecticut, and in a related civil settlement, the company has agreed to pay a total of $11.5 million in civil and criminal restitution over five years. Other product lines offered by RCS have not been under investigation and are not affected by this agreement. Raytel Medical Corporation will guarantee the payment owed by RCS. The company learned of the Government's investigation on June 23, 2000 when Government agents executed a search warrant at RCS's offices and interviewed many of its employees. The company entered into today's plea because some of its senior employees misled the agents on the day the search regarding certain Medicare testing guidelines. RCS's President and Chief Executive Officer, Jason Sholder pointed out that the Medicare testing guidelines in question are subject to interpretation, and different Medicare offices around the country in fact interpret them differently. He also commented that medically, the tests, as conducted by RCS, were clinically appropriate and served their intended purpose. 2 Mr. Sholder further stated that the company hopes the global settlement of the case will permit the company and its employees to move beyond what has been a burdensome and distracting yearlong investigation. "We have been developing some innovative products and services while this investigation has been ongoing," he said, "and all of us at Raytel want to put this matter behind us so we can turn our full attention toward bringing the benefits of these services to our patients and customers." RCS, based in Windsor, Connecticut, is the largest provider of transtelephonic pacemaker testing services in the U.S. Its trained technicians test more than 80,000 patients, who are referred to RCS by more than 10,000 doctors from around the country. Mr. Sholder said that RCS believes so many doctors refer their patients to the company because of the quality service it provides, the fact that its technicians are available 24 hours a day, and because the service is more convenient for elderly patients who would otherwise have to make a trip to the doctor's office for pacemaker evaluations. -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

   1
                                       CONTACT: Jason Sholder, President and CEO
                                                                  (800) 367-1095


             RAYTEL ANNOUNCES CONCLUSION OF GOVERNMENT INVESTIGATION

     June 25, 2001 --- Raytel Cardiac Services, Inc. (RCS), a subsidiary of
Raytel Medical Corporation (Nasdaq:RTEL), announced today that it has reached
agreement with the federal government which will result in the conclusion of the
government's investigation of the company. RCS has pleaded guilty and has been
sentenced today in U.S. District Court in Hartford, Connecticut to a charge of
obstructing a criminal investigation arising out of the initial investigation
reported by the Company in June of 2000. In a plea agreement with the U.S.
Attorney's office in Connecticut, and in a related civil settlement, the company
has agreed to pay a total of $11.5 million in civil and criminal restitution
over five years. Other product lines offered by RCS have not been under
investigation and are not affected by this agreement. Raytel Medical Corporation
will guarantee the payment owed by RCS.

     The  company learned of the Government's investigation on June 23, 2000
when Government agents executed a search warrant at RCS's offices and
interviewed many of its employees. The company entered into today's plea because
some of its senior employees misled the agents on the day the search regarding
certain Medicare testing guidelines.

     RCS's President and Chief Executive Officer, Jason Sholder pointed out that
the Medicare testing guidelines in question are subject to interpretation, and
different Medicare offices around the country in fact interpret them
differently. He also commented that medically, the tests, as conducted by RCS,
were clinically appropriate and served their intended purpose.

   2


     Mr.  Sholder further stated that the company hopes the global settlement of
the case will permit the company and its employees to move beyond what has been
a burdensome and distracting yearlong investigation. "We have been developing
some innovative products and services while this investigation has been
ongoing," he said, "and all of us at Raytel want to put this matter behind us so
we can turn our full attention toward bringing the benefits of these services to
our patients and customers."

     RCS, based in Windsor, Connecticut, is the largest provider of
transtelephonic pacemaker testing services in the U.S. Its trained technicians
test more than 80,000 patients, who are referred to RCS by more than 10,000
doctors from around the country. Mr. Sholder said that RCS believes so many
doctors refer their patients to the company because of the quality service it
provides, the fact that its technicians are available 24 hours a day, and
because the service is more convenient for elderly patients who would otherwise
have to make a trip to the doctor's office for pacemaker evaluations.