U.S. reaches settlement with 457 hospitals over cardiac device

The Justice Department announced Friday that hundreds of hospitals will give back $257 million in Medicare payments because doctors implanted cardiac devices in violation of government rules.

The settlements encompass nearly 500 hospitals in 43 states where cardioverter defibrillators were implanted in Medicare patients too soon after they suffered a heart attack, had heart bypass surgery or angioplasty.

Several hospitals in Southern California were hit with fines by federal prosecutors.

St. Joseph Health System of Irvine agreed to pay $2.7 million on behalf of 10 area hospitals.

Providence Health & Services paid $2.9 million, which included its hospitals in Burbank, Torrance, Mission Hills and Tarzana. In San Diego, Scripps Health had five hospitals involved and paid $5.6 million.

Medicare sets waiting periods of up to 90 days before implanting the $25,000 devices, which deliver mild electric shocks to restore a normal heart rhythm. Clinical trials have shown the heart often recovers its own rhythm during that time, making the pricey defibrillators unnecessary.

“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine.”

For its part, St. Joseph said it was grateful to reach a settlement and advised patients to talk with their physician if they have questions about the cardiac device they received.

In a statement, Providence said it takes “compliance very seriously” and decided to settle to avoid costly and lengthy litigation.

Scripps said “physicians believed they were acting in the best interest of their patients” at all times and measures have been put in place to ensure the government is not inappropriately billed.

A 2011 study led by researchers at Duke University of 111,707 patients that received cardioverter defibrillators found that nearly a quarter received no clinical benefit. Those patients were also shown to develop significantly more post-procedural complications, including death.

The settlements, said to be among the largest of their kind, are the result of a federal whistleblower lawsuit filed in Florida seven years ago by cardiac nurse Leatrice Ford Richards and Thomas Schuhmann, a health care reimbursement consultant.

Under the False Claims Act, the whistleblowers will reap about $38 million from the settlements.

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