Report: 210 US hospitals withheld device warranty credits from Medicare

Over 200 U.S. hospitals failed to pass along $4.4 million in warranty credits from device manufacturers to Medicare between calendar years 2008 and 2013, according to a recent audit of federal financial statements cited by the Star Tribune.

An inspector general's report, which was released March 15, found 210 hospitals across the country failed to report millions in manufacturer warranty credits that should have been sent to Medicare.

"Medicare contractors incorrectly paid hospitals $7.7 million for cardiac device replacement claims rather than the $3.3 million they should have been paid, resulting in potential overpayments of $4.4 million," the audit report reads.

Auditors said the 210 hospitals now have a 60-day window to return Medicare overpayments.

For the report, auditors analyzed 296 surgeries to replace pacemakers, defibrillators and other devices in Medicare patients and found none of the hospitals properly billed Medicare for the surgeries. In one scenario, Medicare paid one hospital $28,779 to replace a defibrillator after a product recall. However, Medicare should have only paid $3,824 to the hospital for the surgery because most of the cost was covered by the device manufacturer.

The audit report, conducted by Medicare's Chicago-based office, does not cite specific hospitals or device makers involved.

Medicare officials need to continue pushing for better record-keeping to ensure proper billing, the auditors concluded.

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