Replacing Failed Heart Devices Cost Medicare $1.5B: Report

Federal investigators indicate that Medicare costs associated with replacing defective heart devices alone topped $1.5 billion. 

The Department of Health and Human Services’ Office of Inspector General (OIG) released an early alert to the Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andrew Slavitt on September 30, announcing preliminary results of an ongoing review of how much replacing defective medical devices cost the Medicare program.

According to the OIG’s preliminary findings, the cost of replacing seven heart devices that were recalled or had high failure rates resulted in at least $1.5 billion in Medicare payments. The devices themselves were not identified in the letter, but OIG estimated that they had been implanted in nearly 376,000 Medicare beneficiaries. In addition, the devices cost patients another $140 million in copayments and deductibles.

The OIG suggests in the preliminary report that CMS invest fully in the Unique Device Identifier (UDI) program as a way to more quickly spot devices that are causing problems. It could also help CMS more accurately determine how much it costs Medicare to replace defective devices by putting the number on claims forms.

“The inclusion of the DI could assist in identifying the costs to Medicare for recalled or defective medical devices, help ensure patient safety, and safeguard Medicare trust funds,” the OIG report states.

In July 2014, the FDA finalized guidance on the creation of a Global Unique Device Identification Database (GUDID), following the issuance of a final rule on the unique device identifier (UDI) programissued in September 2013.

The FDA intends to phase in the UDI system, starting with high-risk devices. However, some low-risk medical devices will be partially or fully exempt. The agency first proposed the rule in July 2012.

In the past, the U.S. public often had to wait for problems to be noticed, since adverse event reports were not consistently tracked and the manufacturer was largely responsible for identifying issues after medical devices were introduced. The first warnings about problems with medical devices frequently came from oversees, since Australia and the U.K. have extensive databases for medical devices hip replacement systems and knee implants.