Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
By Eric Topor
Oct. 30 — The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements.
An implantable cardioverter defibrillator (ICD) treats chaotic, extremely fast, life-threatening heart rhythms by delivering a shock to the heart, restoring the heart’s normal rhythm. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare, the DOJ said Oct. 30. Medicare coverage for the device costs approximately $25,000.
Attorney Joseph E. B. “Jeb” White, with Nolan Auerbach & White PA in Philadelphia, told Bloomberg BNA that “while the number of hospitals involved in this settlement announcement is noteworthy,” there are likely many more that filed similar false claims.
According to a national coverage determination (NCD) issued by the Centers for Medicare & Medicaid Services, an ICD shouldn't be implanted in patients within 40 days of suffering a heart attack, or within 90 days of having a bypass or angioplasty operation, subject to certain exceptions, in order to allow the patient's heart a chance to recover on its own. The DOJ alleged that the settling hospitals implanted ICDs in patients during the prohibited waiting period from 2010 through 2013.
“In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the U.S. and represents one of this office’s most significant recoveries to date,” U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida said in a statement.
“Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine,” he said.
Kirk Ogrosky, an attorney with Arnold & Porter LLP in Washington, told Bloomberg BNA Oct. 30 that “[a] notable feature of this settlement is the fact that certain professional guidelines conflicted with Medicare’s coverage decisions.” Ogrosky said “physicians were treating the patients before them doing what they thought best, and the hospitals are stuck paying the bill.”
(Click image below to enlarge.)
“In recent years, we have seen the Justice Department recover from hundreds of hospitals that improperly billed for kyphoplasty procedures. Now, the Justice Department has set its sights on improper defibrillator billings,” said White, adding that “the ‘everybody else is doing it' defense is not working.”
Thomas S. Crane, an attorney with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC in Boston, was more circumspect in his view of the scope of the settlements.
“The large number of hospitals involved indicates this was much more of an overpayment recovery action addressing ambiguous regulations rather than anything to do with fraud,” Crane told Bloomberg BNA.
Ogrosky cautioned that “[e]very provider who files claims that rely on a professional’s medical judgment needs to understand that they may be on the hook where claims are submitted that do not comply with coverage rules.” Ogrosky added, “While large in the aggregate, the average hospital paid about half a million dollars to settle. Yet the years of legal fees, expert costs and other expenses make this a significant matter for the entire hospital community.”
The DOJ said it was “continuing to investigate additional hospitals and health systems.”
White said, “This statement is a clear shot across the bow to other hospitals that they should self-disclose similar improper billings.”
Principal Deputy Assistant Attorney General Benjamin C. Mizer said in a statement, “While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules.”
Mizer added that the DOJ was “confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”
Another notable aspect of the investigations was the use of “evidence-based medicine,” according to the DOJ, which involved a panel of cardiologists that reviewed “thousands of patients' charts.”
Many of the hospitals that settled the ICD allegations were named defendants in a whistle-blower lawsuit filed by relators Leatrice Ford Richards and Thomas Schuhmann, a cardiac nurse and health-care reimbursement consultant, respectively (United States ex rel. Ford Richards v. Abbott Northwestern Hosp., S.D. Fla., No. 08-cv-20071-PCH, settlement announced 10/30/15).
The whistle-blowers received more than $38 million of the total settlement amount as successful relators under the False Claims Act, and could receive portions of any additional settlements.
• Adventist Health System Sunbelt Healthcare Corp.: 11 affiliated hospitals settled for $5.5 million;
• Ascension Health: 32 affiliated hospitals settled for $14.9 million;
• Catholic Health East: 13 affiliated hospitals settled for $11 million;
• Catholic Health Initiatives: 17 affiliated hospitals settled for $7.8 million;
• Community Health Systems: 31 affiliated hospitals settled for $13 million;
• Hospital Corporation of America: 42 affiliated hospitals settled for $15.8 million;
• Health Management Associates Inc.: 27 affiliated hospitals settled for $7.2 million; and
• Tenet Healthcare: 19 affiliated hospitals settled for $12.1 million.
Bryan A. Vroon in Atlanta represented the whistle-blowers.
To contact the reporter on this story: Eric Topor at email@example.com
To contact the editor responsible for this story: Janey Cohen at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)