Navigating the rules and regulations of Medicare is just one of the administrative challenges hospitals and healthcare providers face today. There’s no doubt that it’s a complex program; its size and scope make complexity inevitable. According to the Center for Medicare and Medicaid Services, Medicare currently covers over 55 million Americans.
A landmark False Claims Act settlement on February 17th concluded a nationwide investigation into the possible misuse of cardiac devices on Medicare patients. The alleged FCA violations occurred in over 500 hospitals around the country, and all demonstrated either a systemic misunderstanding or a dangerous disregard for one of Medicare’s most central components: the National Coverage Determination. Although the hospitals under investigation settled the allegations, there is still an urgent need for greater transparency about how and why Medicare regulations are created.
NCDs and MEDCAC
The National Coverage Determination (NCD) is one of the vital components of Medicare. As a taxpayer-funded program, Medicare can only cover services, equipment and diagnostic procedures that are proven necessary and reasonable. NCDs are how Medicare officials determine which services are necessary and eligible for federal reimbursement.
Each NCD has a 6-9 month process involving review by the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC), any necessary technology assessments by external experts, and a 30-day public comment phase.
Once the NCD process is complete, MEDCAC releases the final determination to the public. Members of the public are also permitted to attend the meetings that facilitate the NCD for each service or device. MEDCAC is comprised of a maximum of 100 experts in fields pertinent to the Medicare program, including medicine, public administration and medical ethics.
Although it is possible for anyone to request an NCD, a formal, evidence-backed request must be made demonstrating that the item or service is medically necessary.
This process exists so that reimbursement and regulations for each Medicare-covered item and procedure are supported by as much factual evidence as possible. The NCD process is also instrumental in protecting Medicare patients and ensuring that they are receiving the best quality of treatment possible, no matter which healthcare provider they see.
Implantable Cardioverter Defibrillators (ICDs)
The nationwide investigation that concluded on the 17th involved a violation of the NCD-indicated requirements for a cardiac device called the ICD. An ICD is a tiny electronic device implanted near or connected to the heart of a patient experiencing extremely fast or erratic heartbeat patterns. Once the device is in place, it detects whenever the heart’s patterns have become life threatening and deliver a shock to the organ, restoring it to normal patterns.
As this is a serious and expensive procedure, there are very specific regulations in place to govern how and when it is performed on Medicare patients.
ICDs can be implanted in patients who have suffered heart attacks, heart bypass surgery or angioplasty, but they cannot be implanted right away. If the patient has had a heart attack, Medicare requires healthcare providers to wait at least 40 days before performing the procedure. For patients who’ve had a bypass or angioplasty, that waiting period is 90 days. This gap exists to allow hospitals and health centers to monitor whether the heart is able to resolve its fibrillation naturally. It is also there for the patient’s safety; implanting an ICD immediately after a traumatic cardiac incident can in fact be dangerous.
The recent FCA investigations suggested that 51 hospitals had violated this waiting period requirement from 2003 to 2010. There could be many reasons why the alleged violations arose, but a likely incentive is that Medicare reimbursement for each ICD procedure is approximately $25,000.
ICD risks
Implanting an ICD before it is deemed medically necessary can pose both danger and significant inconvenience for patients. Generators, metal detectors, magnetic headphones, and cell phones can cause interference, so patients with ICDs are advised to be especially cautious.
ICDs have saved many lives, but they have also been known to deliver unnecessary and painful shocks in some patients. This is particularly dangerous for patients who drive, because the jarring shocks and arrhythmia can cause them to pass out. In the event that the devices have a glitch, the results can be deadly. In a 2005 case, 29,000 ICDs were recalled because they short-circuited and may have killed at least two patients.
Battery replacement is an additional risk. Replacing them requires follow-up surgery several years after the initial implantation, exposing patients to possible infections or an elevated risk of heart failure and life-threatening electric shocks.
These risks and inconveniences should give pause to hospitals that implant ICDs too early for monetary reasons.
Federal investigation of ICD procedures at hospitals
The 51 hospitals involved settled for a total of $23 million to resolve the allegations, and the government concluded its investigation into waiting period violations for ICD implantation nationwide. In the previous portion of the investigation, the government accused 457 U.S. hospitals of False Claims Violations tied to ICD waiting periods, and recovered over $250 million in settlements.
The Justice Department released the names and locations of the hospitals and affiliated healthcare facilities that paid settlements nationwide. Some of the most notable settlements include:
- Adventist Health System, FL ($5.5 million settlement)
- Ascension Health, MO ($14.9 million settlement)
- Baylor Health Care System, TX ($4 million settlement)
- Cleveland Clinic Foundation, OH ($1.6 million settlement)
- Community Health Systems, Inc., TN ($13 million settlement)
- Emory Healthcare Inc., GA ($2.4 million settlement)
- Hospital Corporation of America, TN ($15.8 million settlement)
- Monongalia County General Hospital Company, WV ($4.8 million settlement)
- Mount Sinai Medical Center, FL ($1.9 million settlement)
- New York and Presbyterian Hospital, NY ($4.1 million settlement)
- Joseph Health System, CA ($2.7 million settlement)
Whistleblowers help decrease cardiac device fraud
Two Florida whistleblowers filed the initial qui tam lawsuit that sparked the nationwide investigation and eventual settlements. The qui tam relators were cardiac nurse Leatrice Ford Richards and healthcare reimbursement consultant Thomas Schuhmann. For their role in reporting False Claims Act violations, they have received over $38 million. In a promising sign of progress, the whistleblowers’ actions and federal investigation led to a 28% decrease in ICD procedures in hospitals nationwide and over $2 billion in correlated Medicare savings since 2008, when the lawsuit was filed.
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