Report: Hundreds of hospitals have settled with DOJ over cardiac procedure investigation

Investigation first launched in 2010

See the Advisory Board's take on this story.

Hundreds of hospitals have settled with the Department of Justice over the alleged overuse of implantable cardioverter defibrillators (ICDs) under the False Claims Act (FCA)—and an official announcement from federal officials may be coming soon, Lisa Schencker reports for Modern Healthcare.

Background on investigation

Since 2010, DOJ has been investigating hospitals for allegedly billing Medicare for using ICDs in patients that do not meet evidence-based eligibility guidelines. ICDs are among the most costly medical devices—costing $40,000 or more apiece—currently covered by Medicare.

Specifically, government lawyers are reviewing cases that violate strict "timing guidelines" established in 2005 under Medicare coverage rules. Although ICDs may be used for primary prevention and not solely in reaction to a cardiac event, Medicare will not cover ICDs if they are implanted:

  • Within 40 days of the patient suffering a heart attack; or
  • Within 90 days of the patient undergoing an angioplasty or bypass surgery.

The investigation has significantly reduced the number of costly heart devices implanted in patients since 2010, according to Modern Healthcare.

Doctors have raised objections to the government's inquiry, arguing that the Medicare coverage rules are inflexible, outdated, and conflict with other clinical recommendations for ICDs. Some hospitals have developed policies to help physicians and patients identify different payers for ICDs in cases that Medicare will not cover, according to Lynn Adam, an attorney at King & Spaulding.

How DOJ's ICD investigation is changing cardiac care

Additional details

Most of the settlements under the investigation have not been made public—although a few have been disclosed as part of financial reports have totaled tens of millions of dollars, Schencker says. None of the hospitals that have disclosed settlements have admitted liability, according to Schencker.

Frank Sheeder, a partner at DLA Piper whose clients have been involved in the investigation, estimates that "there are over 500 hospitals that are the subject of the initiative, and ... that the vast majority of them have reached settlements with [DOJ]."

Similarly, Kevin Cornish, a managing director at Navigant, which has worked with more than 50% of providers targeted in the investigation, said that hundreds of hospitals had settled with DOJ.

DOJ could announce the results of the investigation and recovery of funds—which might be the largest ever under the FCA in terms of the number of hospitals—"in the coming weeks," Schencker reports.

According to experts, the investigation:

  • Marks the first time the federal government has alleged such widespread FCA violations on the basis of medically unnecessary procedures;
  • Is the first time the government has conducted a large investigation grounded in a legal theory that finds hospitals liable for their staffs' medical decisions; and
  • Demonstrates how the government is using data to bring cases against providers (Schencker, Modern Healthcare, 9/28).

The Advisory Board's take

Brian Maher, Cardiovascular Roundtable

The coming announcement of the ICD settlements is one of those seminal events in national efforts to curb wasteful utilization and spending.

It will end a highly controversial and publicized battle between providers, CMS, and DOJ that has played out over the past decade. And while it may finally bring some resolution to this specific investigation, it definitely does not end the issue at hand–that there is still significant variation in the use of expensive health care services.

In fact, I would argue that things will begin to intensify, for four reasons.


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