An HHS probe into possible false billing at hospitals was preceded by subpoenas to the largest makers of cardiac defibrillators, MODERN HEALTHCARE has learned.
Three companies said they received subpoenas in January from the Seattle office of the HHS inspector general.
The subpoenas asked for information on implantable defibrillators while they were in clinical trials. The companies, Cardiac Pacemakers Inc., Med-tronic and Ventritex, complied with the requests. They declined to release further details.
Telectronics Pacing Systems also received a subpoena earlier this year regarding investigational devices. The Englewood, Colo.-based company makes pacemakers and defibrillators. Further information wasn't available late last week.
The companies' defibrillators are among the devices named in subpoenas recently served to at least 100 hospitals (June 27, p. 4). Thought to be led by the HHS inspector general's regional office in Seattle, the investigation focuses on whether hospitals have billed Medicare improperly for investigational devices.
Medicare regulations generally bar payment for medical procedures or services performed using devices that haven't been approved for marketing by the Food and Drug Administration. However, Medicare's actual policy has been more flexible. The program has paid for such devices when physicians have decided they offered appropriate treatment for patients already admitted to a hospital (See related story, p. 54).
The false-billing probe now targets 10 categories of cardiac devices made by 26 companies. All recently received FDA approval or are in clinical trials to gain it.
The subpoena received by Medtronic, which makes devices in five of the categories, asked for information on defibrillators only, a spokesman said.
Manufacturers have made striking advances in defibrillators recently.
Last year, Minneapolis-based Med-tronic received FDA approval to market an implantable defibrillator that uses varying electrical pulses to prevent heart attacks. Ventritex, based in Sunnyvale, Calif., won approval for a similar device shortly afterward. An older device, marketed since 1985 by St. Paul, Minn.-based CPI, delivers a painful jolt, which has limited its use.
Medtronic and CPI also earned approval for transvenous leads, which spare patients open-chest surgery for defibrillators. Many physicians have used the CPI lead with the Ventritex pacemaker. The combination still is in clinical trials, so reimbursement is hazy.
MODERN HEALTHCARE contacted 16 other companies with devices named in the probe. Eleven said they hadn't received subpoenas. The president of Angleton, Texas-based Intermedics, which is developing a defibrillator, said he didn't believe the firm had received a subpoena but wasn't able to confirm that with its parent. Four companies didn't respond to requests for information.
A January letter from the HHS' Chicago office to Medicare intermediaries and carriers might hold a clue to the device-maker subpoenas and foreshadow the false-billing investigation.
"Recent correspondence received in the regional office indicates that contractors may be paying for medical devices not approved for marketing*.*.*.*and the related medical procedures or services," the letter said. "The devices referenced in the subject correspondence included implantable pacemakers, leads and defibrillators.
"Traditionally, it has been the responsibility of the companies that develop new technologies, and that later market them for profit, to finance the trials necessary to demonstrate their safety and effectiveness," the letter said. "The Medicare program should not be funding clinical trials."