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Failed Heart Devices Cost Medicare $1.5B: Health Dept. OIG Report

A recent government report warns that replacement of failed and recalled heart devices has costs Medicare $1.5 billion over a ten year period, indicating that steps should be taken to better track the effects these defective devices have when they fail. 

The report (PDF) was issued by the Department of Health and Human Services’ Office of Inspector General (DHHS-OIG) on Monday, warning that a lack of device claims data was complicating Medicare payments, and possibly increasing the costs for recalled and failed heart implants.

“We determined that Medicare costs related to the replacement of recalled or prematurely failed medical devices could not be identified and tracked using only claim data,” the report notes. “However, using claim and other data in combination with complex and labor-intensive auditing procedures, we estimated that services related to the replacement of seven recalled and prematurely failed medical devices cost Medicare $1.5 billion during calendar years 2005 through 2014.”

The OIG states that it conducted the review following concerns by the Centers for Medicare and Medicaid Services about the costs of recalled and failed heart devices.

The report comes about a year after two HeartWare Ventricular Assist Device (HVAD) recalls. One, involving controllers with loose connector ports, affected more than 4,500 heart implants.

The HeartWare Ventricular Assist Device (HVAD) is designed to help pump blood from the heart to the rest of the body. It is used in patients who are at risk of death from end-stage left ventricular heart failure. These patients use the pump while waiting for a heart transplant.

The OIG report found that about 73,000 people on Medicare underwent procedures to replace one of seven devices recalled from 2005 through 2014 due to recalls and premature failures, as well as infections, upgrades and other issues. However, the estimates of costs, about $1,5 billion total, were hard to come by due to lacking claims data, and the report indicates that the final price tag is a conservative estimate.

While the $1.5 billion was paid by Medicare, the report estimates that consumers paid $140 million in copays and deductibles due to the heart implant problems.

The report noted that more data requirements could help track both costs and problems with heart devices.

“Medicare claim forms include the medical procedures performed but do not contain a field for reporting medical device-specific information. By including medical device-specific information on the claim forms, CMS could more effectively identify and track Medicare’s aggregate costs related to recalled or prematurely failed devices,” the report recommends. “This could help reduce Medicare costs by identifying poorly performing devices more quickly, which could also protect beneficiaries from unnecessary costs and improve their chances of receiving appropriate followup care more quickly.”

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