At least one hospital system plans to settle soon to resolve its exposure to a yearslong, nationwide federal investigation into the suspected overuse of implantable defibrillators.
Irvine, Calif.-based St. Joseph Health, a not-for-profit with 16 hospitals in California and Texas, noted in a recent bondholder disclosure that it has agreed to settle with the U.S. Justice Department “in the interest of avoiding the delay, uncertainty, inconvenience and expense of protracted litigation.” St. Joseph does not admit any liability, according to the disclosure. The system expects to finalize the settlement in December.
The settlement is at least the second so far stemming from the investigation, which started more than four years ago and may involve hundreds of hospitals.
The disclosure did not indicate the size of the settlement nor the specific allegations, saying only that the Justice Department contacted the system in connection to its nationwide review of whether hospital charges related to implantable cardio-defibrillators met CMS criteria. According to the disclosure, the government had indicated it would review ICD billing and medical records at some of the system's hospitals dating from October 2003 to the present.
St. Joseph Health spokeswoman Susan Solomon said she couldn't comment on the matter, as did a spokeswoman for the Justice Department.
The Justice Department has been quiet about the inquiries and never even formally announced the first settlement with the now-defunct MedCath, a chain of heart hospitals. In that September 2013 settlement, MedCath agreed to pay the government $6.1 million and did not admit any wrongdoing, illegal conduct or liability. The settlement was over allegations that six MedCath hospitals billed Medicare for cardioverter defibrillators that were allegedly implanted in patients in violation of Medicare coverage guidelines, according to a MedCath statement at the time.
The investigation has been controversial among physicians, who say Medicare's coverage rules for the devices are in conflict with other medical guidelines.
The devices cost $40,000 or more, and their use increased after Medicare changed its rules in January 2005 to allow patients to get them for primary prevention of arrhythmia. The rules, however, say the devices can't be implanted within 40 days of a heart attack or 90 days of bypass surgery, and many physicians have elected to implant them outside of those parameters.
Frank Sheeder, chair of the healthcare enforcement and compliance practice for DLA Piper in Texas, said he isn't aware of any settlements other than the St. Joseph and MedCath ones coming out of the investigation thus far. He said it seems the government is “still in the midst of the investigation and efforts to resolve matters with hospitals.”
He said he couldn't comment on whether any of his clients are involved, but he believes hundreds of hospitals are likely part of the investigation.
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