Local hospitals among 457 in U.S. to settle cardiac device billing allegations

At least nine Philadelphia-area hospitals, from Phoenixville to Our Lady of Lourdes, are among hundreds nationwide that agreed to a $250 million settlement with the government over cardiac devices that were implanted in patients in violation of Medicare coverage requirements, the Department of Justice announced Friday.

by Don Sapatkin

Published Oct. 30, 2015, 2:29 p.m. ET

The hospitals were accused of billing for implantable cardioverter defibrillators, electronic devices that are implanted near the heart to detect abnormal rhythms and deliver a shock that resets the beat to normal. The ICDs cost about $25,000 and are covered by Medicare when medical guidelines are met.

These cases did not qualify, according to the Justice Department, which said that the number of defendants – 457 hospitals in 43 states – made this "one of the largest whistleblower lawsuits in the United States." Additional hospitals and health systems are being investigated.

"While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules," Benjamin C. Mizer, head of the Justice Department's Civil Division, said in a statement. "We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health."

The institutions involved did not admit wrongdoing. Among the 70 corporate settlements, which covered actions between 2003 and 2010, were the following:

Catholic Health East, based in Newtown Square, agreed to pay $11 million to settle charges involving 13 affiliated hospitals. They include Mercy Fitzgerald Hospital in Darby, Our Lady of Lourdes Medical Center in Camden, St. Francis Medical Center in Trenton, and St. Mary Medical Center in Langhorne.
Community Health Systems Inc. of Franklin, Tenn., a total of $13 million for 31 affiliated hospitals, including Brandywine Hospital in Coatesville and Phoenixville Hospital.
Cooper Health System in Camden, $1.2 million.
Deborah Heart and Lung Center in Browns Mills, $1 million.
Tenet Healthcare of Dallas, $12.1 million for 19 affiliated hospitals, including Hahnemann University Hospital.

Asked for comment, Cooper released a statement saying that the "nationwide regulatory review . . . involved a technical discrepancy between the government's guidelines and clinical practice."

Deborah's vice president for legal and regulatory affairs, Susan Bonfield, said in a statement that after reviewing 240 patient cases , "the government alleged that in a handful of cases, Deborah lacked documentation to show that early implantation met their justification requirements." She said the "government made no allegation that the ICDs were unnecessary or that any patient's health or safety had been compromised, only that they had been implanted too early, in some cases by a matter of a day or so."

King of Prussia-based Universal Health Services Inc. paid $4.9 million for 19 affiliated hospitals, none of them in the Philadelphia region.

Several other entities in the tri-state area also settled, from Wilmington, Del.'s Christiana Care Health Services Inc. and Christiana Hospital ($2.5 million) to Pittsburgh-based UPMC $5.4 million, and New Brunswick, N.J.-based Robert Wood Johnson's Health Care Corp., Health Network Inc., and University Hospital ($5.8 million).

The Justice Department announcement made no mention of injuries. It said that Medicare coverage guidelines were based on clinical trials and guidance from cardiologists, manufacturers and patient advocates.

The department said that the devices "generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty," and noted that the waiting periods – 40 days for a heart attack and 90 days for bypass or angioplasty – "is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary."

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 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. They were represented by Bryan Vroon, an Atlanta-based attorney.