Cape Cod Hospital: The Review Used the Wrong Medicare Rule

The Cape Cod Hospital TAVR settlement required the hospital to pay $24,393,507 to resolve allegations that it knowingly billed Medicare for procedures that failed patient-evaluation requirements. The hospital submitted approximately 800 Medicare TAVR claims during the period at issue. It admitted that its own review had applied a newer, less restrictive coverage rule to older procedures.

Cape Cod Hospital operates in Hyannis, Massachusetts, and began offering transcatheter aortic valve replacement in 2015. Medicare required independent examinations of prospective patients, a documented clinical rationale and access to that rationale for the team performing the procedure.

An interventional cardiologist employed by the hospital brought the whistleblower case. The Justice Department announced the resolution on May 16, 2024.

What Medicare Required Before a TAVR Claim

Medicare’s TAVR heart-team requirements made the patient evaluation part of the hospital’s right to payment. The required physicians had to examine the patient independently, explain their clinical judgment in writing and make that explanation available to the team responsible for the procedure.

The hospital’s admitted facts describe the rule change. Before June 21, 2019, two cardiac surgeons had to examine the patient face-to-face and independently evaluate suitability for TAVR. From that date, the required examiners were an interventional cardiologist and one cardiac surgeon. The documentation requirement stayed the same.

That change matters when reviewing older claims. A procedure performed under the earlier rule had to meet the earlier examination requirement. Testing it against the later combination of specialists could miss the absence of the second cardiac surgeon’s evaluation.

The written rationale had a job beyond recording that someone approved the procedure. It carried each required examiner’s clinical judgment to the medical team that would perform it. The coverage process connected who examined the patient, what they concluded and what the treating team could see before proceeding.

How Cape Cod’s TAVR Review Missed Noncompliant Claims

The review began with another hospital. Cape Cod had contracted with another hospital to supply cardiac surgeons for services including TAVR. Cape Cod billed Medicare for the facility fee and its own staff’s professional services. The contracting hospital billed for its surgeons’ professional services. Different organizations submitted bills arising from the same procedures.

The contracting hospital contacted Cape Cod about reviewing TAVR procedures. Both hospitals then independently reviewed records from a sample of 90 patients selected by the contracting hospital.

The contracting hospital told Cape Cod it would issue a full refund to Medicare for all TAVR cases performed at Cape Cod and disclose the matter to its Medicare contractor. Cape Cod took a different course. In the facts it accepted in the settlement, the hospital acknowledged:

Cape Cod reviewed procedures from before the rule change using only the less restrictive rule that followed it. It also failed to identify some records that did not comply with either version. Its review found six noncompliant claims in the original sample, of which four were Medicare claims. The other hospital had proposed a full refund; Cape Cod’s refund covered only those four Medicare claims.

A review of a more extensive set of medical records for an expanded sample of 105 procedures produced a very different result. Nearly half failed the applicable requirements. Some lacked the required independent, face-to-face examinations. Others lacked the documented clinical rationale or its availability to the procedure team.

The claims covered procedures from November 1, 2015, through December 31, 2022. Cape Cod’s admitted facts state that applying the expanded review’s conclusions to that larger group made nearly half noncompliant and therefore claims that should not have been billed.

The existence of an internal audit answered very little without knowing which rule it applied and what its reviewers accepted as compliance.

The Hospital Program and the Individual Patient

TAVR coverage rules address both the hospital’s qualifications to run a program and the evaluation of each patient. Those requirements affect different parts of hospital operations.

The 2019 Medicare coverage determination set qualifications for hospitals beginning a TAVR program and required participation in a national audited registry. Cape Cod’s admissions concerned the next level: the examinations, documentation and sharing required for individual patients. Those duties put the clinical rationale in the hands of the team preparing to perform TAVR.

What Cape Cod Hospital Admitted in the TAVR Settlement

Cape Cod accepted responsibility for the facts describing its examinations, flawed review, limited refund and expanded review findings. The government alleged that the hospital knowingly submitted noncompliant claims.

The Justice Department also said the conduct continued despite internal warnings. Heart patients depended on the evaluations the coverage rules required for their safety. The hospital’s response to concerns belongs alongside the patient records in explaining what happened.

Cape Cod received credit for cooperation and remediation. The government’s announcement describes voluntary production of materials, identification of relevant medical records, the admission that it failed to follow applicable requirements and corrective measures.

The hospital also entered a five-year Corporate Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General. That agreement provided for annual review of its paid Medicare claims by an Independent Review Organization.

The settlement also prevented Cape Cod from shifting the covered bills to patients or other payers. It agreed not to seek payment for those billings from the patients or anyone responsible for their bills. The hospital’s payment problem would not become the patient’s replacement bill.

What Evidence Is Needed to Prove Fraud?

For the Cape Cod TAVR conduct, the evidence connected the required examinations, the written clinical rationale, its availability to the procedure team and the Medicare claims that followed. The review history added another question: what did the hospital know about those records when it decided which claims needed correcting?

The procedure date and the examiner’s specialty determined which examination requirement applied. The review’s instructions and conclusions can show how the hospital judged those records. Health care staff who know how a review was conducted may hold a part of the story that the billing data alone cannot tell.

A healthcare insider’s view can be narrower than the whole case and still explain an important part of it. A physician may know how independent evaluations were conducted. A clinical coordinator may understand how the team received the rationale. A reimbursement employee may know which claims the hospital reviewed and which it refunded. Those are different views of the same patient-to-payment sequence, and they are the connections our whistleblower experts examine with you.

How Much Is a Whistleblower Claim Worth?

The Justice Department announced that the Cape Cod physician whistleblower would receive approximately $4.36 million from the resolution. The physician brought the case under the False Claims Act’s qui tam provisions, which allow a private person to bring a case on the government’s behalf and share in its recovery.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the TAVR Review Worked

If you saw required evaluations skipped or a hospital review overlook noncompliant claims, tell our whistleblower experts what happened. We connect your knowledge of the clinical process to the billing decisions, build the case with you and bring in Medicare fraud whistleblower lawyers who understand hospital coverage disputes. We stay beside you as your case moves from the patient records to the pursuit of a recovery.