HHS: Medicare spent $1.5B on faulty cardiac devices

Medicare spent approximately $1.5 billion on defective heart devices implanted in thousands of beneficiaries, according to a report from the Department of Health and Human Services released in late September.

The cost was associated with 7 specific cardiac devices implanted into 375,991 beneficiaries, according to the report, all of which were recalled or which had high failure rates.

The HHS said it subpoenaed the 3 manufacturers who produced the 7 devices for a list of all patients implanted with them, and identified 72,710 which had received device replacements. The report did not name the 3 manufacturers of the devices in the report.

The replacements, which were due to recalls, premature device failures and necessary upgrades “resulted in 8.2 million replacement-related claims totaling $5.1 billion in Medicare payments to providers and an additional $501 million in beneficiary copayments and deductibles,” according to the report.

The department said it required “complex audit procedures” to review the claims and determine the total cost due only to recalls and device failures, which it found to be at $1.5 billion in Medicare payments and $140 million in beneficiary copayments and deductibles. The remaining cost of the $5.1 billion was associated with device upgrades and replacements resulting from infections, the HHS said.

The HHS said that the Centers for Medicare and Medicaid Services and the FDA recently co-signed a letter supporting the capture of the device identifier portion of UDIs on claims forms for implantable devices.

The department said the shift would “result in several benefits,” including identification of poorly performing devices to lower cost and improve care. The change could also aid in cost-recovery efforts and limiting fraud and abuse by “providing a means to identify unreported manufacturer credits.”

“We believe that this early alert provides important information that policy makers should take into consideration as they contemplate revisions to the claim forms. Therefore, we suggest that CMS collaborate with the Accredited Standards Committee X12 to include the DI on the next version of the claim forms to assist in identifying the costs to Medicare for recalled or defective medical devices, help ensure patient safety, and safeguard Medicare trust funds,” HHS wrote in its report.

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