Senate probes Medicare billings for investigational devices - Updata

Healthcare Financial Management, April, 1996

A Senate subcommittee has reopened its examination of hospitals' Medicare billing practices for investigational medical devices and procedures. Sen. William Roth (R-Del.), chairman of the Governmental Affairs Permanent Subcommittee on Investigations, has expressed his concern over the subcommittee's findings that certain hospitals knew they were directly violating Medicare's investigational devices policy but persisted in the practice. In at least one hospital, patient consent forms were removed from the hospital's files to conceal a procedure's experimental nature. The subcommittee also found that some hospitals continued to bill Medicare for these procedures, even after receiving subpoenas from the Department of Health and Human Services (HHS) inspector general.

Hospitals sometimes use investigational devices, such as pacer cardioverter defibrillators (PCDs), because they provide optimal patient care, according to Dennis Stillman, FHFMA, associate administrator for finance, University of Washington Medical Center, Seattle, Washington. Testifying at the hearing, Stillman said that although the subcommittee staff "did not want me to [discuss] the medical benefits of the treatment at issue, the fact remains that we cannot separate the propriety of the billings from the clinical care provided." HCFA had audited several of the university's PCD claims, Stillman noted. The agency determined that the use of the device was medically necessary and subsequently approved the claims. The preferred action for hospitals would be to obtain pre-authorization from HCFA whenever possible to ensure appropriate billing practices.

While some hospitals knowingly billed Medicare improperly for investigational devices, Farrell Maier, CMPA, director of patient accounts, Hillcrest Medical Center, Tulsa, Oklahoma, was praised by subcommittee ranking minority member Sam Nunn (D-Ga.) for "refusing to bill Medicare for these devices because he knew it was against Medicare policy." Commenting before the subcommittee, Maier said that since the healthcare system is so complex, "the integrity of the whole system depends on the integrity of every individual within the system."