DOJ: Nearly 500 Hospitals Pay United States Over $250 Million to Resolve False Claim Act Allegations Related to Implantation of Cardiac Devices

The Department of Justice announced on Friday, October 30, that they have reached 70 individual settlements involving 457 different hospitals in 43 states, totaling over $250 million. These settlements are related to allegations that cardiac devices were implanted in Medicare patients in violation of Medicare coverage requirements. The list of hospitals and health systems which settled with the government comprise some of the country’s largest and well known health systems including Adventist Health, Ascension, Tenant, HCA, Scripts Health, and Emory Health

The settlements revolve around a device known as an implantable cardioverter defibrillator (ICD), which is an electronic device that is implanted near, and connected to, the heart. The ICD detects and treats chaotic, rapid, life-threatening heart rhythms, known as fibrillations, by delivering a shock to the heart, which restores the heart’s normal rhythm. The ICD works similarly to an external defibrillator, except it is small enough to be implanted directly into the patient’s chest. Only patients with certain clinical characteristics and risk factors qualify to have their ICD covered through Medicare.

ICDs each cost $25,000 and Medicare coverage is based on a National Coverage Determination, which states that ICDs should not be implanted in patients who recently suffered a heart attack, heart bypass surgery, or angioplasty. The NCD has also set waiting periods for the implantation procedure of 40 days after a heart attack and 90 days after bypass or angioplasty. The waiting periods are there to allow the patient’s heart an opportunity to heal without requiring the implantation of the device. The allegations involved in this settlement were that some doctors at the hospitals involved chose to implant the devices without adhering to the required guidelines.

Head of the Justice Department’s Civil Division, Principal Deputy Assistant Attorney General Benjamin C. Mizer, stated, “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. We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”

Interestingly, “the settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits. … In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims,” U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida said.

While this is one of the largest hospital fraud cases prosecuted by the Department of Justice, it is not the largest in monetary value; however, this settlement does cover more hospitals than any other action ever prosecuted by the Department of Justice.

Most of the settling defendants were named in a qui tam lawsuit brought under the False Claims Act. Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant, filed the original lawsuit in federal district court in the Southern District of Florida. Ms. Richards and Mr. Schuhmann, as the whistleblowers, will share more than $38 million from the settlements. These settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.

While there has been no determination of liability, the Department of Justice will continue to investigate additional hospitals and health systems for similar billing procedures. Each of the individual settlements can be found here for a more detailed look.