A Powerful Shock to the System: Cardiac Rhythm Management at the False Claims Act Crossroads


For the past several months, a series of announced hospital settlements with the U.S. Department of Justice  under the Federal False Claims Act has been gathering momentum and interest.   Reported to be the product of years of investigative work, the 450 plus hospitals that have settled with the government for more than$250 million dollars are rumored to yet be only the tip of the iceberg of a nationwide investigation into the suspected overuse of implantable cardiac devices. These ICDs are spendy, costing about $25,000 each in comparison to a more conventional pacemaker that might cost less than 50 percent as much. It has been noted elsewhere that, "[c]ardiovascular disease remains one of the largest cost drivers in medicine."

Anything involving more than 450 American hospitals ought to be of interest and an investigation involving a rumored twice that number of American hospitals out to be riveting.  The fact that HCA has 42 hospitals, to date, involved in these settlements (though scores more, reportedly, involved in the investigation) also ought to be of interest. HCA's troubled history with overuse of lucrative cardiac treatments is the stuff of legend. HCA is a hospital behemoth, particularly in the disproportionately Medicare enrolled population of Florida.  An estimated two thirds of the entrants on this 2014 list of the most profitable hospitals in the United States are HCA facilities.  A full five percent of all U.S. hospital services take place at an HCA facility. 

In addition, the subterranean dispute beneath all this concerning  the role of Medicare National Coverage Determinations in the area of cardiac rhythm management also matters.  None of the three biggest hospital systems involved in the settlement agreements, to date, have conceded liability. Community Health Systems (31 settling facilities to date) delicately noted, in an October 2015 statement, that "[t]he issue involved a highly technical interpretation of a Medicare national coverage determination that was the subject of strong disagreement in the medical community."  But that is the rub, the Medicare National Coverage Determination on cardiac rhythm management and ICDs was not highly technical or particularly highly technical for a technical field.

It was controversial, however. It is worth thinking about why it was controversial. A Medicare National Coverage Determination is arguably one of the few restraints the Medicare system explicitly places on  provider discretion to determine the scope of Medicare coverage for a certain diagnosis. Medicare's general mandate to provide to its beneficiaries what is reasonable and necessary for the diagnosis or treatment of an illness or injury sets scant limit, in and of itself, on what may be covered. Medicare National Coverage Determinations are infrequently made and, to the extent they cluster in areas of high-cost arguably low-value care, they are always controversial.  They are, surprisingly,  non-transparent to  those, arguably, most interested in the scope of what Medicare might cover: Medicare beneficiaries. 

So, just what happened at these facilities? ICDs, apparently,  were implanted in many cardiac rhythm management patient Medicare beneficiaries that were not Medicare coverage reimbursable, falsely representing to the U.S. Government that they were (by billing for them and their implantation costs  through the Medicare program) and by representing to the individual Medicare beneficiary patient/implantee that they were within the Medicare scope of coverage for each of them.   

Was this the product of  dismal provider ignorance of the revised Medicare National Coverage Determination in this area? Was it confidence that the Medicare National Coverage Determination in this area would not be enforced so long as any conflicting practice protocol could be cited? Was it awareness that Medicare Coverage Determinations have, historically, been difficult to audit for compliance combined with a telling  lack of awareness that new Medicare data and data search capabilities would make it possible for whistle blowers — including two cardiac healthcare reimbursement consultants — to search out those hospitals and those individual providers implanting ICDs before the 40-day post heart attack milestone, for example, where a significant percentage of cardiac patients may no longer need something like an ICD?  Perhaps it was all of these things and more.

One thing we do know:  physicians billed for 70,969 of these devices under Medicare in 2008 and 51,052 in 2013, so somebody's reading the Medicare National Coverage Determinations now, at any rate. Now, that's a shock to the system. 


x-posted at Prawfsblawg

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