OIG: Defective device costs hard to track without UDIs on claim forms

Insurance claims forms

In a letter sent Friday to Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt, the Health and Human Services Department's Office of Inspector General urges the agency to include unique device identifiers (UDIs) on claim forms.

OIG notes that seven recalled or failed devices cost Medicare $1.5 billion and beneficiaries $140 million in copayments and deductibles, but that obtaining information on the devices involved a cumbersome subpoena process, as well as a review of medical records. The agency ould not determine from current claim forms the specific devices used or whether a device was replaced due to a recall or defect.

It calls for CMS to collaborate with the Accredited Standards Committee X12 to include the UDI on the next version of the claim forms.

"Our preliminary results show that there is a significant impediment to readily identifying Medicare’s total costs caused by a medical device recall, a device that prematurely failed, or a necessary device upgrade," OIG said. "The complex audit procedures required and the time-consuming process of obtaining and reviewing device recipients’ medical records underscore not only the need for providers to indicate whether the device replacement was due to a recall or defective device, but also for including medical device-specific information on claim forms."

Despite previous pushback on the idea, CMS in July joined the U.S. Food and Drug Administration in calling for UDIs to be added to Medicare claim forms.

Requiring device-specific information on claim forms, which would help identify poorly performing devices, would help Medicare cut costs, reduce unnecessary expense for patients and help ensure they receive appropriate follow-up care, OIG noted.