Hos­pi­tals face false claim penal­ties if they can’t prove that their ICD cases fol­lowed Medi­care clin­i­cal guide­lines

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Few peo­ple who suf­fer car­diac ar­rest out­side of a hospi­tal live to see their own dis­charge pa­pers af­ter treat­ment. That stark risk of death—a widely cited study put the sur­vival rate at 8%—weighs heav­ily on car­diac physi­cians as they try to de­cide whether pa­tients at risk of sud­den ar­rest should have an au­to­matic de­fib­ril­la­tor sur­gi­cally im­planted to reg­u­late ir­reg­u­lar car­diac rhythms that threaten to stop the heart.

But a coun­ter­vail­ing force has come to bear against im­plan­ta­tions in the past two years. The U.S. Jus­tice Depart­ment has waged an ex­ten­sive, pa­tient-by-pa­tient in­ves­ti­ga­tion into thou­sands of im­plantable car­dioverter de­fib­ril­la­tors (known as ICDs) for Medi­care ben­e­fi­cia­ries be­tween 2003 and 2010 at hos­pi­tals across the coun­try.

The in­ves­ti­ga­tion de­pressed sales of the ex­pen­sive ad­vanced heart de­vices na­tion­ally by as much as 20% and has forced physi­cians to con­sider whether their in­de­pen­dent med­i­cal judg­ment con­flicts with fed­eral guide­lines out­lin­ing ex­actly when the de­vices may be used.

Hospi­tal lawyers say the Jus­tice Depart­ment is look­ing to en­force Medi­care’s cov­er­age rules through the lens of the False Claims Act, an anti-fraud statute, which is not how re­views of med­i­cal-ne­ces­sity have been con­ducted.

Three sources fa­mil­iar with the in­ves­ti­ga­tion said they ex­pect a fi­nal res­o­lu­tion from the Jus­tice Depart­ment this fall, but it’s not clear whether hos­pi­tals will have to re­pay any re­im­burse­ments or in­cur penal­ties un­der the False Claims Act for the de­vices—which, at $40,000 apiece, are among the most lu­cra­tive de­vices hos­pi­tals can bill Medi­care for.

An ICD mon­i­tors the heart and can de­liver mild shocks to nudge a slow heart­beat back to a more nor­mal rhythm like a tra­di­tional pacemaker, as well as stronger jolts to the heart’s ven­tri­cles to cor­rect a se­ri­ous heart ar­rhyth­mia be­fore it leads to car­diac ar­rest.

More than 100 U.S. hos­pi­tals are be­lieved to have re­ceived re­quests for records on their im­planted de­fib­ril­la­tors, with the first round go­ing out in March 2010.

Along with any set­tle­ments could come clar­i­fi­ca­tion to CMS’ 2005 na­tional cov­er­age de­ter­mi­na­tion that al­lowed ICDs for pri­mary preven­tion of ar­rhyth­mia—a doc­u­ment widely crit­i­cized by lawyers and health­care providers as too rigid and out­dated to serve as the ba­sis for po­ten­tial pros­e­cu­tions and fraud sanc­tions by the Jus­tice Depart­ment.

Con­sider the na­tion­ally renowned heart pro­gram at the Cleve­land Clinic. Over­all, the data-min­ing al­go­rithm the Jus­tice Depart­ment used to iden­tify po­ten­tial vi­o­la­tions of the ICD rules turned up ques­tions on 4.4% of the 5,950 im­plants at the Cleve­land Clinic be­tween 2003 and 2010.

Dr. Bruce Lind­say, head of the car­diac pac­ing and elec­tro-phys­i­ol­ogy sec­tion for the sys­tem, said he per­son­ally ex­am­ined ev­ery one of the 264 ICD cases the Jus­tice Depart­ment ques­tioned.

Al­though many ob­servers say abuses oc­curred in pock­ets of the ICD in­dus­try, Lind­say said his re­view found no cases at Cleve­land Clinic in which pa­tients in his opin­ion should not have re­ceived their de­fib­ril­la­tors.

How­ever, he did turn up 12 cases in which the tim­ing of the im­plants ap­peared to fall out­side of the rules laid down by the CMS for when pa­tients can re­ceive the de­vices. Lind­say said it’s not clear whether the clinic will have to re­pay any money or face sanc­tions for those in­ci­dences.

Lind­say didn’t hes­i­tate when asked whether doc­tors to­day would have made the same de­ci­sions to im­plant. “Yeah, I think we would,” he said.

“At the time, I think we made the right de­ci­sion, and I don’t feel at all un­com­fort­able de­fend­ing that,” said Lind­say, who is also a past pres­i­dent of the in­dus­try trade group, the Heart Rhythm So­ci­ety. “I think we did the right thing.”

Risk of death

The Jus­tice Depart­ment is specif­i­cally look­ing at cases that ap­pear to vi­o­late the tim­ing rules in the CMS guide­lines.

A copy of an ICD in­ves­ti­ga­tion notice ob­tained from a hospi­tal by Mod­ern Health­care specif­i­cally notes that ICDs will not be cov­ered by Medi­care if they’re im­planted ei­ther:

Within 40 days of a pa­tient hav­ing a heart at­tack.

Within 90 days of a pa­tient hav­ing an­gio­plasty to widen ob­structed ar­ter­ies or by­pass surgery to di­vert blood flow around an ob­structed artery.

The prob­lem, ac­cord­ing to some physi­cians and lawyers, is that in some pa­tients heart at­tacks, an­gio­plas­ties and by­pass surg­eries may still leave the risk of sud­den death from car­diac ar­rest that an ICD is de­signed to ad­dress. In other cases, they say, pa­tients may be ex­posed to far greater sur­gi­cal risks by hav­ing two heart pro­ce­dures if they need a tem­po­rary pacemaker un­til their 40 or 90 days elapse and they can get a ICD.

Other ra­tio­nales to defy the tim­ing rules are less clin­i­cal, such as if a pa­tient is sched­uled to lose health in­sur­ance be­fore the tim­ing rules ex­pire, or if the pa­tient would have to make a long trip mul­ti­ple times in or­der to get an ICD af­ter 40 or 90 days.

Ge­orge Breen, a health­care and lit­i­ga­tion lawyer with Ep­stein Becker & Green who has clients fac­ing ICD in­ves­ti­ga­tions, said the con­flicts be­tween the CMS tim­ing rules and a physi­cian’s med­i­cal judg­ment can cre­ate dif­fi­cult sit­u­a­tions.

“You have a pa­tient who you be­lieve has a risk of death if you don’t im­plant this de­vice, but the de­vice falls out­side the gov­ern­ment’s tim­ing win­dow,” Breen said. “It makes it a very chal­leng­ing sce­nario for the physi­cian. But I do think you also look at how the sci­ence has de­vel­oped over time. There are more rea­sons to im­plant that the (CMS rule) just does not ad­dress. So what do you do in that sit­u­a­tion?”

The Jan­uary 2005 CMS rules on pre­ven­tive use of ICDs, which ex­panded on ear­lier cri­te­ria for im­plan­ta­tion of the de­vices in Medi­care pa­tients, were in­tended to be ev­i­dence-based guide­lines us­ing the lat­est data from clin­i­cal tri­als.

How­ever, many peo­ple who would need an im­planted de­fib­ril­la­tor would have been ex­cluded un­der the el­i­gi­bil­ity rules for par­tic­i­pants in the clin­i­cal tri­als and, there­fore, are ex­cluded from the Medi­care guide­lines.

Of­fi­cials with the CMS and the Jus­tice Depart­ment de­clined to com­ment about the lim­i­ta­tions of the guide­lines or the ap­par­ently first-of-its-kind le­gal strat­egy of en­forc­ing the terms of a na­tional cov­er­age de­ter­mi­na­tion through a False Claims Act in­ves­ti­ga­tion.

“I can’t talk about a pend­ing in­ves­ti­ga­tion,” said As­sis­tant U.S. At­tor­ney Jef­frey Dickstein, one of three fed­eral at­tor­neys in Miami and Wash­ing­ton spear­head­ing the case for the Jus­tice Depart­ment’s civil division.

Sev­eral ob­servers, in­clud­ing Breen and Lind­say, noted that while the in­ves­ti­ga­tion has dragged on, they have been sat­is­fied that pros­e­cu­tors seemed to be study­ing the medicine be­fore is­su­ing sweep­ing state­ments on the rules or en­force­ment ac­tions.

“I will say that in this mat­ter, DOJ has taken a very thought­ful ap­proach,” Breen said. “They are tak­ing time to make sure they un­der­stand the sci­ence, and they are en­gag­ing de­fense coun­sel.”


Few would sug­gest that the Jus­tice Depart­ment didn’t have sound rea­sons to look into the use of ICDs.

Sev­eral clin­i­cians have de­scribed in in­ter­views a wide­spread be­lief in the car­di­ol­ogy community that at least some physi­cians have abused the guide­lines or even overused ICDs in some cir­cum­stances.

Dr. Jonathan Stein­berg, a Columbia Univer­sity pro­fes­sor and di­rec­tor of the Ar­rhyth­mia In­sti­tute of the Val­ley Health Sys­tem, in New York and New Jersey, said he has seen ques­tion­able im­plan­ta­tions while work­ing as a con­sul­tant and in­spect­ing other hos­pi­tals’ records.

He ac­knowl­edged in­ves­ti­ga­tors’ con­cerns about vi­o­la­tions of the CMS na­tional cov­er­age de­ter­mi­na­tion, or NCD, based on some prac­tices in the in­dus­try.

“They’re not cre­at­ing some­thing out of whole cloth,” Stein­berg said of the in­ves­ti­ga­tors. “No, there is some con­cern that there were a sig­nif­i­cant num­ber of im­plan­ta­tions that vi­o­lated the NCD. There are some that are un­jus­ti­fi­able, and some that, de­spite the vi­o­la­tion of the NCD, are jus­ti­fi­able.”

At his own em­ployer, Val­ley Health Sys­tem, he said the Jus­tice Depart­ment man­dated re­views of 229 de­fib­ril­la­tor im­plan­ta­tions, or about 9% of the hospi­tal’s cases over eight years. Of those, he said 34 turned out to be po­ten­tial vi­o­la­tions of the CMS tim­ing rules for im­plan­ta­tion and could pos­si­bly lead to the hospi­tal hav­ing to re­pay its re­im­burse­ments on those cases.

But un­like Lind­say at the Cleve­land Clinic,

Stein­berg did not think the physi­cians in­volved in the 34 po­ten­tial cases of tim­in­grule vi­o­la­tions—who have since left the hospi­tal—would make the same de­ci­sions again to­day if they had to do it all over again. And he doesn’t think he’s alone in that be­lief, ei­ther.

“Af­ter the Jus­tice Depart­ment started their rounds of in­ves­ti­ga­tions around the coun­try, the im­plan­ta­tion rate of ICDs went down 20% na­tion­ally,” he said. “Most peo­ple be­came a lit­tle more cir­cum­spect about do­ing im­plan­ta­tions.”

Car­diac medicine in gen­eral is no stranger to overuse al­le­ga­tions. Just last year, a study in the Jour­nal of the Amer­i­can Med­i­cal As­so­ci­a­tion re­ported that 12% of coro­nary stents in sta­ble pa­tients ap­peared in­ap­pro­pri­ate, de­spite the risks as­so­ci­ated with an­gio­plasty.

But in Jan­uary 2011, JAMA pub­lished a study ti­tled “Non-ev­i­dence-based ICD im­plan­ta­tions in the United States” that roiled the car­diac-im­plant community.

It con­cluded that about 23% of all im­plantable de­fib­ril­la­tors stud­ied in the na­tional ICD Reg­istry be­tween 2005 and 2010 did not ap­pear to meet the Medi­care tim­ing cri­te­ria.

The study called these cases “non-ev­i­dence­based ICDs”—a find­ing in­ter­preted by many ob­servers as a form of overuse: “One in five pa­tients who re­ceive the heart-shock­ing, life­sav­ing de­vices known as im­plantable car­dioverter-de­fib­ril­la­tors, or ICDs, may be get­ting them un­nec­es­sar­ily,” ABC News re­ported af­ter the JAMA study was pub­lished.

Wide vari­a­tions in num­bers

The study for the JAMA ar­ti­cle—funded by a grant from the Na­tional In­sti­tutes of Health’s Na­tional Heart, Lung and Blood In­sti­tute—found wide vari­a­tion in the num­ber of non-in­di­cated ICDs, with many hos­pi­tals’ data show­ing that 40% or more of their de­fib­ril­la­tors were im­planted out­side of guide­lines.

Fur­ther, the study’s authors con­cluded that the pa­tients who re­ceived non-ev­i­dence­based ICDs ap­peared to be at a higher risk for death or com­pli­ca­tions fol­low­ing their pro­ce­dures than peo­ple whose ICDs fell within the tim­ing rules.

“Al­though the ab­so­lute dif­fer­ence in com­pli­ca­tions … is mod­est, these com­pli­ca­tions could have sig­nif­i­cant ef­fects on pa­tients’ qual­ity of life and health­care use, in­clud­ing length of hospi­tal stay and costs,” ac­cord­ing to the JAMA study. “Im­por­tantly, these com­pli­ca­tions re­sulted from pro­ce­dures that were not clearly in­di­cated in the first place.”

“While a small risk of com­pli­ca­tions is ac­cept­able when a pro­ce­dure has been shown to im­prove out­comes, no risk is ac­cept­able if a pro­ce­dure has no demon­strated ben­e­fit,” the Jan­uary 2011 ar­ti­cle opined.

Dam­age the­ory

Ul­ti­mately, many hos­pi­tals are wait­ing for the gov­ern­ment to un­veil its dam­age the­ory in the case.

At­tor­neys who have spo­ken with in­ves­ti­ga­tors about the case say the gov­ern­ment is con­sid­er­ing whether to ap­ply the False Claims Act in some in­stances, which would be sig­nif­i­cant since the law in­cludes the pos­si­bil­ity of tripledam­ages, among other pun­ish­ments.

But Scott Taebel, a Mil­wau­kee at­tor­ney at Hall, Ren­der, Kil­lian, Heath & Lyman, said the gov­ern­ment would have to be pre­pared to show that a hospi­tal acted with in­tent to de­fraud, or with de­lib­er­ate in­dif­fer­ence or reck­less dis­re­gard for the CMS rules, in or­der for False Claims penal­ties to come into play.

“We think with the vast ma­jor­ity of these cases, if there is med­i­cal ne­ces­sity for the ICD im­plant and if the treat­ing physi­cian de­ter­mines that the ICD needs to be im­planted at that time based on doc­u­mented med­i­cal ne­ces­sity, our po­si­tion would be that that would take it out of the purview of False Claims penal­ties,” Taebel said.

Once the dam­age the­ory is known, Taebel said he would ex­pect ne­go­ti­ated dis­cus­sions along a range of po­ten­tial re­pay­ments and dam­ages, pos­si­bly on a pa­tient-by-pa­tient re­view of the records.

Al­berto Gonzales, the U.S. at­tor­ney gen­eral from 2005 to 2007 who is now a lawyer with Waller Lans­den Dortch & Davis, said the Jus­tice Depart­ment would typ­i­cally take time to de­velop a stan­dard pro­to­col in ini­tial tri­als or set­tle­ments and then use that model to pros­e­cute fu­ture cases.

He noted that al­though such mat­ters are com­plex, there’s a sense of ur­gency among hos­pi­tals to have the case re­solved.

“While these are hard cases to pros­e­cute, I think it’s un­der­stand­able to note that for most hos­pi­tals it’s a has­sle and it’s bad for busi­ness to be un­der in­ves­ti­ga­tion,” Gonzales said. “There’s a pres­sure to han­dle these things as quickly as pos­si­ble.” TAKE­AWAY:

Hos­pi­tals may find out soon whether they will have to

re­im­burse Medi­care or face False Claims Act penal­ties for im­plantable de­fib­ril­la­tor surg­eries

go­ing back to 2003.


Since 2005, physi­cians have had to weigh whether their med­i­cal judg­ment would con­flict with the fed­eral guide­lines on use of ICDs.

“They’re not cre­at­ing some­thing out of whole cloth. … No, there is some con­cern that there were a sig­nif­i­cant num­ber of im­plan­ta­tions that vi­o­lated the NCD.” —Dr. Jonathan Stein­berg,

Val­ley Health Sys­tem

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