DOJ settles with 450 hospitals for $250M over False Claims Act allegations

Nearly 500 hospitals in 43 states agreed to pay $250 million in settlements involving cardiac devices that were implanted in patients in violation of Medicare coverage requirements, according to the Department of Justice.

The 70 settlements involved 457 hospitals and included:

  • Ascension Health, based in St. Louis, and 33 of its affiliated hospitals for $14.5 million
  • Catholic Health East, based in Newtown Square, Pennsylvania, and its 13 affiliated hospitals for $11 million
  • Community Health Systems, Inc., based in Franklin, Tennessee, and its 31 affiliated hospitals for $13 million
  • HCA Holdings, Inc. (Hospital Corporation of America), based in Nashville, Tennessee, and its 42 affiliated hospitals for $15.8 million

"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," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division, in the DOJ announcement. "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."  

Medicare covers implantable cardioverter defibrillators (ICDs), electronic devices that are implanted near and connected to the heart, only for patients who have certain clinical characteristics and risk factors. Each device costs $25,000 and Medicare coverage is based on National Coverage Determination (NCD). The NCD states that ICDs should not be implanted in patients who recently suffered a heart attack or heart bypass surgery or angioplasty and has set waiting periods for the procedure of 40 days after a heart attack and 90 days after bypass/angioplasty.

The DOJ alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD. 

"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," said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida in the announcement.

Most of the settlements involved hospitals named in whistleblower lawsuits under the False Claims Act. The whistleblowers have received more than $38 million from the settlements. The DOJ also said it is continuing to investigate additional hospitals and health systems.

However, the DOJ noted that the settlements involve allegations of claims and there has been no determination of liability.

To learn more:
- read the announcement
- check out the list of hospitals involved in the settlement

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