More than 450 hospitals pay over $250 million in cardiac-device investigation
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October 30, 2015 01:00 AM

More than 450 hospitals pay over $250 million in cardiac-device investigation

Lisa Schencker
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    A study published in JAMA showed patients implanted with dual-chamber and single-chamber ICDs had similar mortality and hospitalization outcomes.

    (This story was updated at 5 p.m. ET.)

    More than 450 hospitals have settled with the government for more than $250 million as part of a yearslong, nationwide investigation into the suspected overuse of implantable cardiac devices, the U.S. Justice Department announced Friday.

    The hospital systems involved include many of the country's largest, such as Adventist, Ascension Health, Banner Health, Catholic Health Initiatives, Community Health Systems, HCA, Tenet Healthcare Corp. and Universal Health Services among others.

    At 42, HCA had the most hospitals involved in settlements and is paying the highest portion of the settlement, $15.8 million, followed by Ascension Health with 32 settling for $14.9 million and then Community Health Systems with 31 settling for $13 million.

    None of those three systems admitted to any liability as part of their settlements.

    Community Health Systems said in a statement Friday it agreed to the settlement to “avoid the continuing delay, uncertainty, inconvenience and expense of protracted litigation.”

    “The issue involved a highly technical interpretation of a Medicare national coverage determination that was the subject of strong disagreement in the medical community," Community Health Systems said.

    Ascension spokesman Nick Ragone said in a statement that Ascension was pleased to have reached an agreement with the Justice Department. “We are proud and appreciative of the cardiac care provided by our physicians, nurses and other caregivers nationwide to individuals in the communities we serve,” Ragone said.

    An HCA spokesman noted in an e-mail that HCA's settlement was ultimately for fewer than half of the HCA hospitals the Justice Department reviewed.

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    The Justice Department said it is continuing to investigate more hospitals and health systems. Some say the settlement is the largest ever under the False Claims Act based on the number of hospitals involved.

    Benjamin Mizer, head of the Justice Department's Civil Division, said in a statement that the department is confident the settlements will lead to better compliance and significant savings to Medicare while protecting patient health.

    The devices, which cost about $25,000 and are also known as ICDs, are implanted near the heart and meant to detect and treat fibrillation, or fast, life-threatening heart rhythms, by delivering a shock to the heart.

    Their use increased after Medicare changed its rules in January 2005 allowing them for primary prevention of arrhythmia. The rules say the devices cannot be implanted within 40 days of a heart attack or 90 days of bypass surgery or angioplasty, but many doctors have chosen to implant them in such circumstances anyway– leading to the investigation.

    Some legal experts said the case may represent a new way for whistle-blowers to go after large numbers of hospitals.

    The whistle-blowers in this case, Leatrice Ford Richards, a cardiac nurse and consultant, and Thomas Schuhmann, a healthcare reimbursement consultant, originally filed their lawsuit in 2008. They were able to make their allegations against more than 500 hospitals after reviewing codes submitted by hospitals to Medicare, said Bryan Vroon, the whistle-blowers' attorney in Atlanta. The Justice Department then also reviewed diagnosis and procedure codes as well as looking at medical charts, he said.

    “What (the Justice Department) did was show the capability of looking at the clinical care of Medicare patients in a really fair and systematic way, and that's never been done before on this scale,” Vroon said.

    Frank Sheeder, a partner in the law firm DLA Piper, which represented some of the health systems involved in the investigation, said the outcome of this investigation could spur more potential whistle-blowers with access to similarly wide-ranging data.

    “They didn't' really have any substantive knowledge about any particular hospital or health system; it was all done by data,” Sheeder said of the whistle-blowers. He said the investigation could “encourage people who want to become whistle-blowers to work up their cases on the data side.”

    The investigation has raised awareness among hospitals across the country about Medicare's national coverage determination for implantable defibrillators. That investigation is credited with lowering the number of the devices implanted in recent years. Physicians billed Medicare for the devices for 51,052 beneficiaries in 2013 compared with 70,969 beneficiaries in 2008, according to one of the whistle-blowers. Vroon estimates that has resulted in a savings of more than $2 billion to Medicare.

    The investigation, however, has also ignited criticism from physicians who argue that Medicare's coverage rules for the devices conflict with other medical guidelines.

    The purpose of making physicians wait either 40 or 90 days before implanting the devices in patients who've had heart attacks or bypass/angioplasty, respectively, is to give the heart a chance to improve on its own, according to the Justice Department. If a patient's heart improves enough, the device may not be necessary.

    But medical professionals say the Medicare coverage guidelines are at odds with clinical guidelines developed by medical societies.

    “This leaves physicians in the uncomfortable position of knowing that appropriate clinical recommendations may fall outside the scope of the” Medicare rules, according to an opinion column published in the Journal of the American College of Cardiology last year co-written by Dr. Richard Fogel, the then-president of the Heart Rhythm Society. “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.”

    Jesse Witten, a partner at Drinker Biddle and Reath, who also represented some of the systems involved, said the CMS' national coverage determination hasn't kept pace with the standard of care among cardiologists.

    “When you see something like this that is industrywide and affects hundreds and hundreds of hospitals, is this really a crime wave or is there some underlying problem with the design of the government program?” Witten said of the investigation. “It's almost always the latter.”

    Witten said he's seeing some hospitals implant the devices outside of the Medicare guidelines when doctors feel that's the best course and just not billing Medicare for them. Those hospitals are eating the costs themselves, he said.

    He said the investigation has led to significant Medicare savings, but “on the other hand, you hear anecdotally about people who were put at risk of cardiac sudden death because they didn't have an ICD implanted that the physician felt should be implanted.”

    The whistle-blowers whose allegations led to the investigation have received more than $38 million from the settlements.

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