Medicare costs due to seven recalled or prematurely failed medical devices reached $1.5 billion over a 10-year period, according to a report from HHS' Office of Inspector General.
The report highlights findings from the OIG's probe into whether Medicare claim data alone could be used to track Medicare costs related to the replacement of recalled or prematurely failed medical devices. The office also sought to identify Medicare costs related to the replacement of seven such devices.
The OIG said it ultimately determined it could not use Medicare claim data alone to determine Medicare costs related to replacing recalled or prematurely failed medical devices because, "although Medicare claim forms identify the medical procedures performed, they do not contain a field for reporting medical device-specific information."
But the OIG said it was able to use claim and other data, along with auditing procedures, to identify the Medicare costs related to the replacement of seven recalled and prematurely failed medical devices. The office found replacement of those seven devices cost Medicare $1.5 billion between 2005 and 2014. Additionally, the OIG said it found an estimated $140 million in beneficiary copayment and deductible liabilities associated with the seven devices and their related services and procedures.
Based on its findings, the OIG recommended CMS "continue to work with the Accredited Standards Committee X12 to ensure that the device identifier is included on the next version of claim forms," as well as "require hospitals to use condition codes 49 or 50 on claims for reporting a device replacement procedure if the procedure resulted from a recall or premature failure independent of whether there was a device provided at no cost or with a credit."
According to the office, CMS noted the OIG's first recommendation is a policy being considered, and said it "would carefully evaluate the potential that this policy would impose an unnecessary burden on physicians." The OIG said CMS concurred with the office's second recommendation "in cases where payment is impacted."
"We continue to recommend that CMS require hospitals to use condition codes 49 or 50 on claims for reporting a device replacement procedure if the procedure resulted from a recall or premature failure regardless of whether there was a payment impact," the OIG concluded.