A number of US Hospitals have failed to appropriately pay Medicare for warranty credits received from cardiac device manufacturers for recalled devices, according to a new report from the Dept. of Health and Human Services Office of Inspector General.
In the report, a total of 296 payments for recalled cardiac devices were reviewed, and all were found to have not complied with Medicare requirements for reporting manufacturing credits resulting in a total of $4.4 million in overpayments from CMS.
The reported payments came from 210 hospitals investigated in the report which performed procedures to replace defective or recalled defibrillators, pacemakers and their associated electrical leads.
As an example, a single hospital that was issued a credit for a recalled cardiac resynchronization therapy defibrillator failed to report it appropriately and received $31,025 from a medicare contractor when it should have only paid $3,825, resulting in a $27,200 overpayment.
Both outpatient and inpatient procedures were noted for mishandled payments, with inpatient claims resulting in overpayments of $2.4 million and outpatient claims resulting in overpayments of $2 million.
The report concluded that Medicare’s controls were not sufficient to ensure compliance with the credit system.
“Medicare contractors overpaid hospitals because CMS guidance and Medicare contractors’ specific edits did not ensure that hospitals reported manufacturer credits for cardiac medical devices,” the OIG wrote in the report.
The OIG went on to recommend that CMS contact all medicare contractors at the 210 hospitals to “exercise reasonable diligence” to investigate identified overpayments and to track any returned overpayments that have been made, and to educate providers on how to appropriately report manufacturer credits for cardiac devices.
The report also suggested the use of Unique Device Identifiers for medical devices, saying that the inclusion of device identifiers on claim forms could more effectively identify claims in which recalled devices were billed.
“We maintain that the results of this review further support the addition of the DI to the claim form to provide a means to identify unreported manufacturer credits,” the OIG wrote in its report.