The DOJ and ICDs: Understanding Medicare beyond admission, observation, and necessity-for-stay issues

As medical director for external peer review for The Greeley Company, I have seen a number of organizations receiving inquiries from the Department of Justice regarding the issue of implantable cardiac devices (ICD). The DOJ started an initiative to evaluate hospital compliance with Medicare coverage rules for these devices. Perhaps your organization has received a DOJ inquiry already.

The basis for the DOJ's concern was stimulated by an article in Journal of the American Medical Association(JAMA) that evaluated claims data regarding the non-evidence-based use of ICDs. The Medicare rules state that implantation of these devices will not be  reimbursed if performed 30 days following an acute myocardial infarction or if performed 90 days following an interventional cardiology procedure or surgical cardiac revascularization. There are, however, other rules that provide clinical justification to override the above time frames; that information can only be obtained in general from a review of the medical record. The data from the JAMA article indicated that in a substantial proportion of cases, hospitals did not meet the 30- and 90-day rules.

Two DOJ attorneys in Florida sent letters of inquiry to hospitals with significant numbers of cases falling outside of those parameters. In some cases, the lawyers sent requests for specific evaluations of those cases. Unlike with the approach that Medicare took with recovery audit contracts (RAC), where the government subcontracted the record review to approved auditors,  the DOJ has requested that hospitals review their own records and present whether the other rules would apply or if hospitals interpreted the rules in such a way that justify the non-qualifying cases. Ultimately, hospitals that inappropriately used ICDs may have to pay the government substantial amounts of money for at least the component of care related to the ICD implantation that did not meet the Medicare requirements.

The purpose of today's article is not to debate or examine the criteria or the methods of the DOJ. Rather, it is to raise the question of why so many physicians fall into the potential trap of performing a procedure that does not meet Medicare requirements and extrapolating whether these lessons can be applied to other situations. In discussing these situations with a number of organizations, two issues have emerged.

The first issue is physicians’ lack of awareness of Medicare criteria. Since Medicare in the past has not preapproved or pre-denied procedures like commercial payers do, physicians are often unaware that the Medicare criteria may be different. Physicians often assumed that unless someone, typically in case management, has told them that something is specifically not approved, then they believe it is legitimate and reasonable to proceed. This is not a matter of intentional overutilization of procedures, but being trapped by conflicting systems.

The second issue is that physicians have been taught to deal with clinical disagreements with external criteria though documentation. Physicians often feel that there is a clinical justification for each procedure despite external criteria. Often times, case managers tell them that if they just document the clinical justification, they can proceed with a procedure. Again, because Medicare doesn’t prospectively deny procedures, physicians do not receive feedback on cases that do not meet the criteria; thus, physicians can easily fall into a pattern for a given clinical justification.

The lesson here is that it is the obligation of the hospital’s utilization and peer review programs to be acutely aware of criteria for Medicare beyond just admission, observation, and necessity-for-stay issues. The hospital needs to provide physicians with information that can prevent them from performing procedures that they feel are clinically justified and are paid for by commercial payers.

Once the government finds a method for detecting areas for which it may retrieve healthcare dollars, it tends to replicate it. Hospitals would be wise to implement more proactive programs to evaluate indications for procedures for other types of Medicare conditions that have clear criteria.

Robert J. Marder, MD, CMSL, is the vice president of The Greeley Company, a division of HCPro, Inc., in Danvers, MA.