Desert Regional Medical Center and Tenet: The Cardiac Loop Recorder Settlement

The Desert Regional loop recorder settlement called for Tenet Healthcare Corporation and Desert Regional Medical Center to pay $1.41 million over allegedly unnecessary cardiac monitor implants. Cardiologists at Tenet’s Palm Springs, California, hospital allegedly implanted the unnecessary devices in beneficiaries from 2014 to 2017.

A Former Employee Brought the Desert Regional Case

A former Desert Regional employee brought the qui tam case behind the settlement. The Department of Justice announced the resolution on February 11, 2020. The settlement paid a 17% whistleblower reward.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Someone who understands both the treatment decision and the account of it that reaches billing can connect parts of the story that sit in different departments.

Desert Regional’s Allegedly Unnecessary Cardiac Loop Recorders

The government alleged that Desert Regional cardiologists implanted unnecessary cardiac monitors, often called loop recorders. The allegation belongs alongside the hospital cases over unnecessary cardiac procedures: the reason for the intervention is central to the payment question.

Medicare’s medical-necessity rule ties payment to reasonable and necessary care. In a medical-necessity case, the procedure note can establish what happened while leaving the central question unresolved: why did this patient need it? The clinical findings, the explanation for the implant and the claim have to be considered together.

Why the National Defibrillator Settlements Were Different

The national ICD settlements concerned Medicare coverage waiting periods after cardiac events. In its October 30, 2015 announcement, the Justice Department reported more than $250 million in settlements involving 457 hospitals.

Those cases concerned implantable cardioverter defibrillators placed during periods when Medicare generally required waiting: 40 days after a heart attack and 90 days after bypass surgery or angioplasty. The waiting periods gave the heart time to recover enough that a defibrillator might become unnecessary.

For that allegation, the cardiac-event date and implantation date were central. At Desert Regional, the government’s allegation concerned whether the loop recorders were needed.

What the Chart Has to Explain

The chart supplies the diagnoses and procedures used in healthcare claims. For inpatient payment, what the chart says helps determine what Medicare pays.

The work passes from the treating team to documentation, coding and billing staff. A person in the procedure room may know the reason given for the implant. Someone in coding may know what the documentation was made to support. Someone reviewing the claim may see the payment consequence.

A 2023 study in the Journal of Forensic and Investigative Accounting, Types of Hospital Frauds: Nature and Methods of Prevention, found fraudulent billing of medical services in 42 of the 80 hospital cases it examined through Justice Department announcements. That category included unnecessary services and upcoding. The paper explains why health care billing can conceal the underlying decision: treatment becomes codes, and a third-party payer processes the claim. In the paper’s view, complexity and collusion often combine to hide hospital fraud.

The paper identifies medical providers and billing staff among those involved in fraudulent billing. A claim is the financial version of a treatment decision, and understanding that decision can require knowledge from more than one desk.

What the Other Cardiac Cases Show

Other hospital stent false-claims cases make the medical-necessity question concrete. At EMH Regional Medical Center and North Ohio Heart Center, the government alleged that patients had heart disease but insufficient occlusion, or blockage, to require the angioplasty and stents performed. A former cath lab manager brought the whistleblower case.

The patients had heart disease. The allegation was that they did not need those procedures.

At King’s Daughters Medical Center, the Justice Department alleged that physicians falsified medical records to justify unnecessary coronary stents and diagnostic catheterizations billed to Medicare and Medicaid. The alleged false records supplied the explanation the procedures needed.

St. Joseph Medical Center in Towson settled allegations that included medically unnecessary stents. Its integrity agreement required an independent review of cardiac catheterization procedures for medical necessity and appropriateness.

At Blessing Hospital, the alleged overpayments concerned the facility component of cardiac catheterization procedures involving unnecessary coronary stents. The hospital had received payments from Medicare and Medicaid and disclosed the matter itself. The physician performed the procedure. The hospital had its own bill attached to it.

The Device Business and the Warnings Inside the Hospital

Device cases can also connect hospital billing to financial interests and internal warnings. At Sanford Health, the government alleged that colleagues repeatedly warned the hospital about a neurosurgeon’s unnecessary procedures involving devices in which he had a substantial financial interest. Despite those warnings, Sanford allegedly continued employing him, allowing him to profit from the devices and submitting claims for the surgeries. Two hospital surgeons brought that case.

The St. Joseph Tacoma spinal-surgery settlement concerned hospital billing for surgery at more spinal levels than necessary and medically unnecessary spinal fusions. CHI Franciscan and the hospital settled, as did the surgeon separately. Here, the extent of the operation was part of the allegation.

The seller’s instructions can matter too. In a separate case involving Kyphon, a whistleblower’s amended complaint alleged that sales training pushed hospitals toward a more expensive setting for a spinal procedure: the company directed its sales representatives to pitch the procedure to hospitals for inpatient admission, although in most cases those admissions were medically unnecessary.

That allegation describes a billing decision being sold alongside a device. For a hospital employee or device-company insider, knowing where that instruction came from can explain why the same decision keeps appearing in the claims.

Separate From Tenet’s Earlier Billing Settlement

Tenet’s 2006 outlier fraud settlement addressed a different set of allegations. The government’s announcement of that resolution described inflated charges that produced excessive outlier payments, bills for services and supplies never provided, physician kickbacks and unsupported diagnosis coding.

The earlier allegations reached the price list, the billing records and physician financial arrangements. The Desert Regional allegation returned to the treatment decision: whether beneficiaries needed the implanted monitors.

The Decisions Behind the Implants

If you know why cardiac devices were implanted and what the hospital billed, speak with our whistleblower experts about what you witnessed. We work with you to build your strongest case around the treatment decisions, the claims and the people who knew, bring in whistleblower lawyers who know hospital medical-necessity cases, and stay with you through every step.