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Since 2005, physicians have had to weigh whether their medical judgment would conflict with the federal guidelines on use of ICDs.
Since 2005, physicians have had to weigh whether their medical judgment would conflict with the federal guidelines on use of ICDs.
Photo credit: GETTY IMAGES

Cardiac arrests

Hospitals anxious they could face hefty False Claims penalties in implanted cardiac defibrillator cases

By Joe Carlson
Posted: July 21, 2012 - 12:01 am ET

Few people who suffer cardiac arrest outside of a hospital live to see their own discharge papers after treatment.

That stark risk of death—a widely cited study put the survival rate at 8%—weighs heavily on cardiac physicians as they try to decide whether patients at risk of sudden arrest should have an automatic defibrillator surgically implanted to regulate irregular cardiac rhythms that threaten to stop the heart.

But a countervailing force has come to bear against implantations in the past two years. The U.S. Justice Department has waged an extensive, patient-by-patient investigation into thousands of implantable cardioverter defibrillators (known as ICDs) for Medicare beneficiaries between 2003 and 2010 at hospitals across the country.

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The investigation depressed sales of the expensive advanced heart devices nationally by as much as 20% and has forced physicians to consider whether their independent medical judgment conflicts with federal guidelines outlining exactly when the devices may be used.

Hospital lawyers say the Justice Department is looking to enforce Medicare's coverage rules through the lens of the False Claims Act, an anti-fraud statute, which is not how reviews of medical-necessity have been conducted.

Three sources familiar with the investigation said they expect a final resolution from the Justice Department this fall, but it's not clear whether hospitals will have to repay any reimbursements or incur penalties under the False Claims Act for the devices—which, at $40,000 apiece, are among the most lucrative devices hospitals can bill Medicare for.

An ICD monitors the heart and can deliver mild shocks to nudge a slow heartbeat back to a more normal rhythm like a traditional pacemaker, as well as stronger jolts to the heart's ventricles to correct a serious heart arrhythmia before it leads to cardiac arrest.

More than 100 U.S. hospitals are believed to have received requests for records on their implanted defibrillators, with the first round going out in March 2010.

Along with any settlements could come clarification to CMS' 2005 national coverage determination that allowed ICDs for primary prevention of arrhythmia—a document widely criticized by lawyers and healthcare providers as too rigid and outdated to serve as the basis for potential prosecutions and fraud sanctions by the Justice Department.

Consider the nationally renowned heart program at the Cleveland Clinic. Overall, the data-mining algorithm the Justice Department used to identify potential violations of the ICD rules turned up questions on 4.4% of the 5,950 implants at the Cleveland Clinic between 2003 and 2010.

Dr. Bruce Lindsay, head of the cardiac pacing and electro-physiology section for the system, said he personally examined every one of the 264 ICD cases the Justice Department questioned.

Although many observers say abuses occurred in pockets of the ICD industry, Lindsay said his review found no cases at Cleveland Clinic in which patients in his opinion should not have received their defibrillators.

However, he did turn up 12 cases in which the timing of the implants appeared to fall outside of the rules laid down by the CMS for when patients can receive the devices. Lindsay said it's not clear whether the clinic will have to repay any money or face sanctions for those incidences.

Lindsay didn't hesitate when asked whether doctors today would have made the same decisions to implant. “Yeah, I think we would,” he said.

“At the time, I think we made the right decision, and I don't feel at all uncomfortable defending that,” said Lindsay, who is also a past president of the industry trade group, the Heart Rhythm Society. “I think we did the right thing.”

Risk of death

Dr. Jonathan Steinberg,  Valley Health System
“They’re not creating something out of whole cloth. … No, there is some concern that there were a significant number of implantations that violated the NCD.”

Dr. Jonathan Steinberg, Valley Health System

The Justice Department is specifically looking at cases that appear to violate the timing rules in the CMS guidelines.

A copy of an ICD investigation notice obtained from a hospital by Modern Healthcare specifically notes that ICDs will not be covered by Medicare if they're implanted either:
  • Within 40 days of a patient having a heart attack.
  • Within 90 days of a patient having angioplasty to widen obstructed arteries or bypass surgery to divert blood flow around an obstructed artery.
The problem, according to some physicians and lawyers, is that in some patients heart attacks, angioplasties and bypass surgeries may still leave the risk of sudden death from cardiac arrest that an ICD is designed to address. In other cases, they say, patients may be exposed to far greater surgical risks by having two heart procedures if they need a temporary pacemaker until their 40 or 90 days elapse and they can get a ICD.

Other rationales to defy the timing rules are less clinical, such as if a patient is scheduled to lose health insurance before the timing rules expire, or if the patient would have to make a long trip multiple times in order to get an ICD after 40 or 90 days.

George Breen, a healthcare and litigation lawyer with Epstein Becker & Green who has clients facing ICD investigations, said the conflicts between the CMS timing rules and a physician's medical judgment can create difficult situations.

“You have a patient who you believe has a risk of death if you don't implant this device, but the device falls outside the government's timing window,” Breen said. “It makes it a very challenging scenario for the physician. But I do think you also look at how the science has developed over time. There are more reasons to implant that the (CMS rule) just does not address. So what do you do in that situation?”

The January 2005 CMS rules on preventive use of ICDs, which expanded on earlier criteria for implantation of the devices in Medicare patients, were intended to be evidence-based guidelines using the latest data from clinical trials.

However, many people who would need an implanted defibrillator would have been excluded under the eligibility rules for participants in the clinical trials and, therefore, are excluded from the Medicare guidelines.

Officials with the CMS and the Justice Department declined to comment about the limitations of the guidelines or the apparently first-of-its-kind legal strategy of enforcing the terms of a national coverage determination through a False Claims Act investigation.

“I can't talk about a pending investigation,” said Assistant U.S. Attorney Jeffrey Dickstein, one of three federal attorneys in Miami and Washington spearheading the case for the Justice Department's civil division.

Several observers, including Breen and Lindsay, noted that while the investigation has dragged on, they have been satisfied that prosecutors seemed to be studying the medicine before issuing sweeping statements on the rules or enforcement actions.

“I will say that in this matter, DOJ has taken a very thoughtful approach,” Breen said. “They are taking time to make sure they understand the science, and they are engaging defense counsel.”


Few would suggest that the Justice Department didn't have sound reasons to look into the use of ICDs.

Several clinicians have described in interviews a widespread belief in the cardiology community that at least some physicians have abused the guidelines or even overused ICDs in some circumstances.

Dr. Jonathan Steinberg, a Columbia University professor and director of the Arrhythmia Institute of the Valley Health System, in New York and New Jersey, said he has seen questionable implantations while working as a consultant and inspecting other hospitals' records.

He acknowledged investigators' concerns about violations of the CMS national coverage determination, or NCD, based on some practices in the industry.

“They're not creating something out of whole cloth,” Steinberg said of the investigators. “No, there is some concern that there were a significant number of implantations that violated the NCD. There are some that are unjustifiable, and some that, despite the violation of the NCD, are justifiable.”

At his own employer, Valley Health System, he said the Justice Department mandated reviews of 229 defibrillator implantations, or about 9% of the hospital's cases over eight years. Of those, he said 34 turned out to be potential violations of the CMS timing rules for implantation and could possibly lead to the hospital having to repay its reimbursements on those cases.

But unlike Lindsay at the Cleveland Clinic, Steinberg did not think the physicians involved in the 34 potential cases of timing-rule violations—who have since left the hospital—would make the same decisions again today if they had to do it all over again. And he doesn't think he's alone in that belief, either.

“After the Justice Department started their rounds of investigations around the country, the implantation rate of ICDs went down 20% nationally,” he said. “Most people became a little more circumspect about doing implantations.”

Cardiac medicine in general is no stranger to overuse allegations. Just last year, a study in the Journal of the American Medical Association reported that 12% of coronary stents in stable patients appeared inappropriate, despite the risks associated with angioplasty.

But in January 2011, JAMA published a study titled “Non-evidence-based ICD implantations in the United States” that roiled the cardiac-implant community.

It concluded that about 23% of all implantable defibrillators studied in the national ICD Registry between 2005 and 2010 did not appear to meet the Medicare timing criteria.

The study called these cases “non-evidence-based ICDs”—a finding interpreted by many observers as a form of overuse: “One in five patients who receive the heart-shocking, life-saving devices known as implantable cardioverter-defibrillators, or ICDs, may be getting them unnecessarily,” ABC News reported after the JAMA study was published.

Wide variations in numbers

The study for the JAMA article—funded by a grant from the National Institutes of Health's National Heart, Lung and Blood Institute—found wide variation in the number of non-indicated ICDs, with many hospitals' data showing that 40% or more of their defibrillators were implanted outside of guidelines.

Further, the study's authors concluded that the patients who received non-evidence-based ICDs appeared to be at a higher risk for death or complications following their procedures than people whose ICDs fell within the timing rules.

“Although the absolute difference in complications … is modest, these complications could have significant effects on patients' quality of life and healthcare use, including length of hospital stay and costs,” according to the JAMA study. “Importantly, these complications resulted from procedures that were not clearly indicated in the first place.”

“While a small risk of complications is acceptable when a procedure has been shown to improve outcomes, no risk is acceptable if a procedure has no demonstrated benefit,” the January 2011 article opined.

Damage theory

Ultimately, many hospitals are waiting for the government to unveil its damage theory in the case.

Attorneys who have spoken with investigators about the case say the government is considering whether to apply the False Claims Act in some instances, which would be significant since the law includes the possibility of triple-damages, among other punishments.

But Scott Taebel, a Milwaukee attorney at Hall, Render, Killian, Heath & Lyman, said the government would have to be prepared to show that a hospital acted with intent to defraud, or with deliberate indifference or reckless disregard for the CMS rules, in order for False Claims penalties to come into play.

“We think with the vast majority of these cases, if there is medical necessity for the ICD implant and if the treating physician determines that the ICD needs to be implanted at that time based on documented medical necessity, our position would be that that would take it out of the purview of False Claims penalties,” Taebel said.

Once the damage theory is known, Taebel said he would expect negotiated discussions along a range of potential repayments and damages, possibly on a patient-by-patient review of the records.

Alberto Gonzales, the U.S. attorney general from 2005 to 2007 who is now a lawyer with Waller Lansden Dortch & Davis, said the Justice Department would typically take time to develop a standard protocol in initial trials or settlements and then use that model to prosecute future cases.

He noted that although such matters are complex, there's a sense of urgency among hospitals to have the case resolved.

“While these are hard cases to prosecute, I think it's understandable to note that for most hospitals it's a hassle and it's bad for business to be under investigation,” Gonzales said. “There's a pressure to handle these things as quickly as possible.”

TAKEAWAY: Hospitals may find out soon whether they will have to reimburse Medicare or face False Claims Act penalties for implantable defibrillator surgeries going back to 2003.

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