Nine hospitals in South Florida are among nearly 500 nationwide that agreed to pay $257 million in a landmark settlement of charges that they improperly billed Medicare for surgical procedures to implant cardiac defibrillators in patients, the U.S. Justice Department announced Friday.
The agreement sets a record for the largest number of hospitals ever to settle allegations of defrauding a government program, and includes local healthcare providers such as Aventura Hospital and Medical Center, Kendall Regional Medical Center, Miami’s Mercy Hospital, Palmetto General in Hialeah and Holy Cross Hospital in Fort Lauderdale.
A federal investigation of the hospitals was launched after two whistle-blowers filed a complaint seven years ago in U.S. District Court in Miami, alleging that hospitals were billing Medicare for implantable cardioverter defibrillators or ICDs placed in patients who did not meet the required medical conditions for the device.
Medicare generally excludes coverage of ICDs in patients who have had coronary bypass surgery or angioplasty within the previous 90 days or within 40 days of a heart attack. The electronic device is implanted near and connected to the heart, where it delivers a shock to restore the organ’s normal rhythm.
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The extensive investigation behind the settlements was heavily influenced by evidence-based medicine.
Wilfredo A. Ferrer, U.S. Attorney for the Southern District of Florida
Bryan Vroon, an Atlanta-based attorney representing the whistle-blowers, said the surgeries were medically unnecessary and potentially harmful to patients because the Medicare guidelines are evidence-based standards.
“Science has demonstrated that when the heart has had a heart attack, the heart is wounded and healing at that time, and it’s not helpful — in fact, it can be harmful — to implant an ICD, and that’s what they were doing.”
Vroon said the surgical procedure is generally billed at about $25,000.
Many of the South Florida hospitals that agreed to the settlement are owned by some of the largest healthcare systems in the country, including Tennessee-based Hospital Corporation of America, which agreed to pay $15.8 million, and Tenet Healthcare headquartered in Texas, which will pay $12.1 million.
Vroon said it’s not yet possible to determine how many times each hospital within a large system billed for the ICD procedure because audits conducted as part of the federal investigation remain sealed.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, said in a written statement that the federal investigation was conducted using evidence-based medicine and “guided by a panel of leading cardiologists and the review of thousands of patients’ charts.”
Some hospital representatives, however, disputed claims that the procedures were medically unnecessary.
Medicare data show that physician billing for ICDs dropped from 70,969 in 2008 to 51,052 in 2013 — a decline of 28 percent. The whistle-blower lawsuit was filed in January 2008.
Shelly Weiss Friedberg, a spokeswoman for Tenet Healthcare, said the federal investigation of ICD procedures was related to whether hospitals complied with “timing requirements” in Medicare’s coverage guidelines.
“The investigation did not question the quality, efficacy or the medical necessity of these procedures,” Friedberg said in the statement. “We are committed to fully complying with all Medicare program requirements and are confident our current compliance program enables us to do so.”
Ed Fishbough, a spokesman for HCA, issued a statement that the company’s settlement ultimately was for less than half of the hospitals included in the government’s initial review.
“HCA makes no admission of wrongdoing in the settlement,” Fishbough said in the statement. Three local HCA facilities, including Aventura Hospital, Kendall Regional Medical Center and Mercy Hospital, were named in the settlement.
Vroon, the attorney representing the whistle-blowers, said the federal investigation led to hospitals reducing the number of ICD surgeries by about 28 percent over the last five years.
He said the reduction represents a savings of more than $2 billion to Medicare during that period, but that ICDs are only a microcosm of a larger pattern of healthcare fraud.
“This is one part of a huge problem,” he said. “The huge problem is unnecessary care.”