450+ hospitals pay DOJ $250M for overuse of ICDs at the expense of Medicare

“The settlements announced on 02 NOV 2015 demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo Ferrer of the Southern District of Florida, in a statement.  “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine.  In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date.  Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”

And the list of offending hospitals could grow larger, as the DOJ said it’s investigating additional hospitals and health systems.

Although they are not part of the agreement, device bigwigs could also take a financial hit from decreased usage of ICDs as a result of the crackdown, although the agreement says the violative implantations occurred between 2003 and 2010, making it unclear whether the practice is ongoing.

The federal Centers for Medicare & Medicaid Services sets National Coverage Decisions for certain devices categories based on clinical trials and stakeholder input, including providers, medical societies, manufacturers and patient advocates.  An NCD is a sought after payment policy because it ensures Medicare reimbursement and eliminates regional variations in federal payments.

The DOJ said the NCD for ICDs pays about $25,000 per device.  It mandates waiting periods of 40 or 90 days following treatment “to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary,” adding, “the NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions.”

“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said principal deputy assistant attorney general Benjamin Mizer, head of the Justice Department’s civil division in a statement. “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”

Whistleblowers Beatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a healthcare reimbursement consultant, have received more than $38 million from the settlements.

The largest individual payment was for $15.8 million. It was made by the Hospital Corporation of American and 42 affiliated hospitals in various states.

Medical device companies increasingly complain of tightening Medicare reimbursement, which they say often does not adequately pay for new technologies.  As the latest settle makes clear, another prong of the federal effort to control the program’s finances is tougher enforcement by the so-called Health Care Fraud Prevention and Enforcement Action Team.  The DOJ boasts that since 2009 the team has recovered more than $16.4 billion in cases of fraud committed at the expense of Medicare and other federal healthcare programs.

REFERENCE:  Fierce Medical Devices; 02 NOV 2015; Varun Saxena

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