Hospital ICD Waiting Period Settlements: The Implant Date Became the Billing Problem

Hospital ICD waiting period settlements resolved allegations that hospitals billed Medicare for implantable cardioverter defibrillators placed during prohibited waiting periods. The government alleged that hospitals charged taxpayers for implants performed before Medicare’s required wait was over. For someone working in cardiac care or reimbursement, the connection is concrete: the patient’s recent heart attack or surgery, the implant date and the hospital’s claim for payment.

What Were Medicare’s ICD Waiting Periods?

The historical Medicare ICD waiting periods were 40 days after a heart attack and 90 days after bypass surgery or angioplasty, with certain exceptions. The wait gave the heart a chance to improve on its own to the point that the patient might no longer need the device. The Department of Justice alleged that each settling hospital implanted devices inside prohibited periods from 2003 to 2010.

An implantable cardioverter defibrillator sits near the heart and delivers a shock when it detects a dangerously fast, chaotic rhythm. The Justice Department’s account of the coverage rule put the device’s cost at approximately $25,000. Whether Medicare would cover it depended on the patient’s clinical characteristics and risk factors, including the timing requirements.

The Centers for Medicare and Medicaid Services developed the national coverage determination from clinical trials and input from cardiologists, other providers, professional societies, device manufacturers and patient advocates. That medical purpose became a condition of Medicare payment.

Medically unnecessary procedure cases, unnecessary stent cases among them, challenge the clinical justification for treatment. The defibrillator campaign challenged when the treatment happened, measured against Medicare’s coverage rule. Its allegation was premature implantation under that rule.

The Kentucky cardiac settlements in 2014 involved different hospitals and allegations of unnecessary treatment. Three cardiologists brought the qui tam case involving Saint Joseph London. The government itself began the investigation of King’s Daughters Medical Center, where it also alleged that physicians falsified records to justify procedures. Those cases put the need for treatment at the center of the hospital’s bill.

Why the Implant Date Became a Medicare Billing Issue

The hospital billed Medicare for a procedure performed by its physician. The Justice Department said it would respect physician judgment while holding hospitals and health systems accountable for procedures at their facilities that failed Medicare’s billing rules. The clinical decision and the hospital’s responsibility for the claim met at the implant date.

That connection runs through the way a hospital gets paid. Medicare pays acute-care hospitals through separate inpatient and outpatient systems. In the inpatient system, the diagnoses and procedures recorded for a stay help determine its payment group. A hospital’s clinical record therefore does financial work as well as medical work. In this campaign, the critical payment condition was the interval between the earlier cardiac event and the implant.

How the National ICD Review Worked

Cardiologists and thousands of patient charts guided the investigation. The U.S. Attorney’s Office for the Southern District of Florida described the review as strongly shaped by evidence-based medicine.

The chart mattered because the allegation depended on a sequence of events in an individual patient’s care. The earlier heart attack, bypass surgery or angioplasty had to be understood alongside the implant. The coverage rule also had exceptions.

The Journal of AHIMA‘s 1999 article Honest Mistake or Fraud? Meeting the Coding Compliance Challenge describes the gap between an automated flag and a supported coding change: a health information professional must review the chart. In the ICD investigation, cardiologists supplied the clinical expertise behind the government’s review of implant timing.

The National Settlements Came in Two Stages

On October 30, 2015, the Department of Justice announced more than $250 million in settlements. There were 70 agreements covering 457 hospitals across 43 states.

The February 17, 2016 announcement brought another group: 51 hospitals across 15 states, settling for more than $23 million. The department described this as the investigation’s final stage.

That final announcement put the nationwide settlement total at more than $280 million across more than 500 hospitals. A waiting period measured in days had become a nationwide hospital billing problem.

A Cardiac Nurse and a Reimbursement Consultant Started the Case

A cardiac nurse and a health care reimbursement consultant brought the national defibrillator qui tam case in federal court in the Southern District of Florida. Most of the settling hospitals were named in it.

Their clinical and reimbursement experience covered both sides of the allegation: when the patient was treated, and the rule that decided whether Medicare would pay.

The Justice Department reported that the whistleblowers received more than $38 million from the first group of settlements and more than $3.5 million from the final group. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Another Device Case Turned on the Hospital’s Billing Decision

The kyphoplasty inpatient billing settlements reached more than 130 hospitals and approximately $105 million by the Justice Department’s December 2015 announcement. There, the government alleged that hospitals billed a spinal-fracture procedure as a more expensive inpatient stay when it could often be performed as outpatient care.

The kyphoplasty hospital settlement totals also came in stages: more than $34 million from 55 hospitals in July 2013, followed by more than $28 million from 32 hospitals in December 2015. The later announcement supplied the cumulative total.

The whistleblowers’ amended complaint against Kyphon put the alleged sales instruction plainly: Kyphon directed its sales representatives to present kyphoplasty to hospital customers for inpatient admission, even though the great majority of those admissions were medically unnecessary.

That alleged instruction connected the sale of a device to the hospital’s admission and billing decisions. In the ICD campaign, the payment condition concerned timing. Both campaigns reached hospitals through the decisions that shaped their Medicare bills.

What a Cardiac ICD Whistleblower May Recognize

A cardiac ICD whistleblower working in healthcare billing may recognize both the timing of treatment and the hospital’s explanation for charging Medicare. The earlier cardiac event supplies the starting point, the implant date supplies the interval, and the claim connects that sequence to public money.

Billing history can matter alongside clinical history. The AHIMA article recommended preserving the original codes, the codes used when the bill went out, and changes after billing. Its point was to make the review and correction history visible. An insider who understands that history can explain what the hospital charged and what a later review changed.

The ICD Claims You Know

If you know why an ICD went in when it did and how the hospital justified the Medicare bill, talk with our whistleblower experts about those claims. We connect the clinical history to the payment rule to build your strongest hospital whistleblower case, and bring in whistleblower lawyers who know hospital Medicare coverage cases. We stay beside you from that first assessment through the case’s resolution.