Medical Device Makers with Minnesota Ties Undergo Medicare Audit

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Medical Device Makers with MN Ties Undergo Medicare Audit
Medical Device Makers with MN Ties Undergo Medicare Audit

Auditors with Medicare’s financial watchdog office, in response to a Freedom of Information Act (FOIA) request, reported they are examining expenses related to problem-prone heart devices manufactured by Medtronic PLC, St. Jude Medical, Inc., and Boston Scientific Corp. Auditors have found that the federal Medicare program has spent billions of dollars on faulty implantable medical devices. Included in these numbers are $1.5 billion tied to seven recalled heart devices made by the three companies that happen to employ thousands of Minnesotans, reports the Star Tribune.

Devices Involved in Medicare Audit

The seven specific heart devices involved in the investigation in the ongoing audit include recalled or defective pacemakers, implantable defibrillators, and the wires called “leads” that connect the devices to the heart.

The auditors’ office said in its FOIA response, “We selected these devices with no intent … to target any device manufacturer.”

The audit is investigating expenses being generated by recalls of Medtronic’s Concerto, Virtuoso and EnTrust defibrillators; St. Jude’s Riata leads and Identity pacemaker; and Boston Scientific’s Teligen and Cognis defibrillators. All three companies with big Minnesota ties.

The inspector general of the U.S. Health and Human Services Department will not have the final audit report published until 2017. However, auditors last fall revealed that shortcomings in Medicare billing records forced them to use subpoenas as well as a painstaking audit process to document $1.5 billion in spending as a result of the seven recalls.

Additional studies have estimated that an eighth recall involving Medtronic’s Sprint Fidelis defibrillator lead, cost Medicare as much as $1 billion. Medicare inspector general Daniel Levinson believes Medicare has spent several billion dollars on monitoring and additional surgeries necessitated by defective medical devices, or devices that had to be replaced sooner than expected.

Parker Waichman LLP has successfully represented individuals who have suffered from injuries allegedly associated with medical device products.

Medical device companies ardently defend the safety of their products and report that the large majority of recalls don’t actually require products to be removed from the body or to be returned to the company, the Star Tribune reports.

Even though the ongoing federal audit is focusing on the costs generated by seven devices that required large-scale removals from patents, the auditors are not likely to recommend that Medicare try to reclaim the money spent on defective and recalled heart devices, according to the report sent by the office in its response to the Star Tribune. Instead, the ongoing audit is attempting to draw attention to omissions in health care billing records that make it difficult to track specifically which devices are implanted in patients.

High-Voltage Shocks in Minnesota Patient

A man had a Medtronic Sprint Fidelis lead implanted for his heart defibrillator two years after the FDA approved sale of the lead in 2005. The leads had a high failure rate and were known for causing shocks when they weren’t necessary. When the man’s wife called for an ambulance, he continued to experience shocks, in what resulted in a total of 27 high-voltage shocks.

Medtronic voluntarily recalled thousands of Spring Fidelis leads, including this patient’s. After he suffered his inappropriate shocks in 2009, Medicare paid to take out his old defibrillator and replace it with a new one, plus new leads. Unfortunately for the patient, the new leads he was told were implanted, St. Jude Medical’s Riata leads, were part of another massive voluntary recall.

The anxiety-ridden patient began seeing his doctor every three months to make sure the new leads weren’t breaking. In 2015, the patient was informed that a mistake had been made concerning his leads’ serial numbers. It seemed the man had received the similarly named, but non-defective Durata leads, reports the Star Tribune.

The man thinks Medicare ought to be able to recoup some of its costs for replacing the defective leads, but was not optimistic of that happening, since it had been approved by the FDA (speaking of the recalled Medtronic and St. Jude leads). He received a small legal settlement from Medtronic, and is not part of any lawsuit against St. Jude Medical.

Daniel Matlis, president of life-science strategy consulting firm Axendia, said, given the problems with devices not being clearly identified in medical records and insurance claims forms, he did not find these experiences surprising.

Although some improvements have been made to include “unique device identifier” (UDI) codes in electronic health records (EHR), those codes are still not included in insurance claims forms, including Medicare’s, according to Matlis.

Medical Device Makers with MN Ties Undergo Medicare Audit
Medical Device Makers with MN Ties Undergo Medicare Audit

Congress required the FDA to set up a UDI system in 2007.  The Centers for Medicare and Medicaid Services (CMS), the FDA’s sister agency, initially disapproved. But, In July 2016, the CMS said it would support including a snippet of the UDI number in claims to improve real-world evaluation of different models of medical devices. The watchdog office supports including a 23-character portion of the full UDI on Medicare insurance claims.

Inspector general Levinson wrote of his approval of including the information on claims as the UDI system “is intended to better detect devices with adverse events, improve device recalls, and enable more robust postmarket surveillance.” Including the information on claims, “could also assist in any related cost-recovery efforts.”

Do You Seek Legal Advice Concerning a Medical Device Injury?

If you or someone you know has been affected by a medical device injury, you may have valuable legal rights. Parker Waichman LLP is a nationwide, renowned personal injury law firm that has successful experience handling device injury cases. We urge you to contact the Parker Waichman medical device injury lawyers at 1-800-YOURLAWYER (1-800-968-7529).