The investigation has raised the ire of physicians, who complain that Medicare's coverage rules—which are the basis of the ongoing investigation—are inflexible, out of date and in conflict with other medical guidelines for the same device.
The federal investigation may eventually target the doctors suspected of implanting too many defibrillators, legal experts say. For now, government lawyers are working toward settlements with the hospitals where the devices were given to patients outside of the strict “timing guidelines” spelled out in Medicare coverage rules.
“This investigation has had a very significant impact on the number of implants that are being performed, and that number has dropped by a considerable amount,” said Jesse Witten, a partner in Washington with Drinker Biddle & Reath. “Although the investigation has not yet yielded many settlements and dollars, the deterrent effect has been very considerable.”
Implantable cardioverter defibrillators, or ICDs, are sophisticated machines wired to patients' hearts that constantly monitor their cardiac rhythms and deliver shocks to correct abnormalities.
At a cost of $40,000 or more apiece, ICDs are among the most expensive devices Medicare will pay for. Use of ICDs increased after January 2005, when Medicare changed its rules so that patients could get them installed for primary prevention, instead of just in reaction to a cardiac event. Former Vice President Dick Cheney had one implanted for preventive purposes in 2007.
After the guidelines were expanded, a team of researchers at Duke University in North Carolina looked to see how well the new rules were being followed and found widespread nonconformance.
Their 2011 article in the Journal of the American Medical Association analyzing device-registry data from 1,227 hospitals concluded that 23% of the implants (about 25,000 between 2006 and 2009) were used in violation of the Medicare National Coverage Determination. The rules say the devices can't be implanted within 40 days of a heart attack or 90 days of bypass surgery.
But the government investigation of ICD overuse was well underway by the time the JAMA article ran. A now-defunct chain of heart hospitals called MedCath received a notice from the Justice Department in March 2010, when investigators sent a civil investigative demand for a MedCath hospital extending back to 2002.
The chain of eight hospitals was in the process of selling off its assets and going out of business at the time. In September 2011, the board of directors set aside $48 million to cover the eventual costs of the ICD litigation, though exactly two years later, a statement from the winding-down firm announced it had paid $6.1 million to resolve allegations at the six hospitals where it retained liability after corporate transfers.
Although the Justice Department often publicizes settlements with healthcare companies, federal prosecutors have never published a release or even acknowledged that the MedCath settlement took place. The company did not disclose how many potential cases it resolved through its settlement.
Last year, Modern Healthcare obtained a copy of a memo that the Justice Department sent to hospitals in the investigation that showed some cases will not be pursued even though the cases fall outside the Medicare timing rules, citing “DOJ discretion in False Claims Act enforcement.”
For example, cases in which patients who would have gotten a traditional pacemaker installed until they could qualify for an ICD because of the timing rules won't be prosecuted if the doctor avoided a second surgery by implanting an ICD instead of a pacemaker.
Two healthcare compliance attorneys wrote in a 2011 report (PDF) that even Cheney's defibrillator fell outside the Medicare coverage rules because of the former vice president's laboratory test results.
This month, the Journal of the American College of Cardiology published an opinion column co-written by the president of the Heart Rhythm Society asserting that the clinical guidelines developed by medical societies on appropriate use of ICDs conflict with the Medicare coverage guidelines.
“This leaves physicians in the uncomfortable position of knowing that appropriate clinical recommendations may fall outside the scope of the” Medicare rules, the article says. “This may place practitioners and hospitals at risk for denial of payment or investigation for possible abuse or fraud even when the decision was clinically justified.”
Individual physicians may eventually have to make that same case before judges and juries.
Attorneys say Justice Department officials have made no secret that they may eventually look past the hospitals where the implantations took place and target the doctors recommending the devices to patients.
“When the DOJ takes a look at each hospital, they also consider who the implanting doctors are,” said healthcare defense attorney Scott Taebel of Hall, Render, Killian, Heath & Lyman in Milwaukee. “Perhaps through the utilization data they could draw some conclusions about some of the individual physician implanters. We have heard discussion that it will be considered.”
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