HHS' inspector general's office has launched a major false-billing investigation to determine whether hospitals are charging the government for the use of non-FDA-approved medical devices.
Medicare and Medicaid generally do not pay providers for the use of medical devices that haven't been cleared by the FDA for marketing by vendors to providers.
HHS has issued subpoenas to an unspecified number of hospitals, requesting extensive documentation of the use of non-FDA-approved devices in medical procedures dating back to 1984.
The investigation represents a potential windfall for the government if its probe is successful, since the subpoena covers thousands of devices used in thousands of procedures over a decade.
The inspector general's office has the authority to assess hospitals a civil monetary penalty of twice the amount of a false claim plus a $2,000 fine per claim.
The inspector general's office in Washington declined comment, but MODERN HEALTHCARE obtained a copy of one of the subpoenas last week.
The subpoena, dated May 28, was served on the hospital by the inspectorgeneral's regional office in Seattle, which is believed to be coordinating the investigation for the agency. The identity of the hospital was removed from the subpoena obtained by MODERN HEALTHCARE.
The subpoena was issued "in connection with an investigation concerning the possible submission of false or improper claims to and their payment by the Medicare and Medicaid programs," the inspector general's office said.
It's not known how many hospitals were served with papers, but a source familiar with the investigation believed that the probe is national in scope and that a random sample of hospitals across the country was hit.
The subpoena asks hospitals to produce a list of all procedures performed within the hospital between April 5, 1984, through March 31, 1994, involving non-FDA-approved medical devices. The hospitals also must produce a list of the insurance carriers charged for the procedures, any DRG billing code used and the amount charged.
The investigation appears to focus specifically on devices used in certain cardiac procedures. For example, the subpoena also wants documentation on "any or all persons employed as the director of the cardiac catheter laboratory, supervisor of the electro-physiology department (or) the cardiac nursing supervisor."
"It appears that the (inspector general) is using a dragnet approach to look for false claims by sending out a large number of subpoenas," said Paul DeMuro, an attorney with Latham & Watkins in San Francisco. Mr. DeMuro represents several hospitals that have received subpoenas.