The billions of dollars that Medicare has spent on recalled or defective medical devices are a “significant cause for concern,” yet the government lacks a reliable way to track such spending a decade after it emerged as a sore point, auditors concluded this week.
The U.S. Health and Human Services inspector general’s office issued a report Monday concluding that Medicare claim forms lack information that would let the government track expenses including $1.5 billion spent on thousands of surgeries for heart devices that were recalled or failed earlier than expected.
Auditors say that what’s missing from the forms is a long string of alphanumeric characters that identify medical devices by make, model and lot number, similar to the VIN on a car.
“The lack of information on the claim forms prevents [Medicare] from being able to fully understand and address the Medicare costs related to recalled or prematurely failed medical devices,” the OIG audit concluded.
“In addition, the lack of information impedes the ability of the [Food and Drug Administration] and [Medicare] to identify poorly performing devices as early as possible. This diminishes device recipients’ chances of receiving timely followup care.”
In 2007, the Centers for Medicare and Medicaid Services said it was concerned about spending on recalled medical devices, and vowed to develop a plan to address the issue, according to the Federal Register at the time.
Eleven years later, the Medicare agency is considering a proposal to include part of the device-identifier in claims forms, though it is also evaluating whether the change would unnecessarily impose a burden on physicians. The earliest that the data could be included on claims forms is 2021.
In response to the audit’s findings, CMS Administrator Seema Verma noted that Medicare routinely recovers money from medical services provided as a result of recalled or defective medical devices though the “Medicare Secondary Payer process.” She didn’t provide exact figures.
The OIG has previously disclosed that it was examining $1.5 billion in spending on seven different types of cardiac devices with Minnesota business ties between 2005 and 2014.
The final audit report said that “painstaking” auditing, including the use of information subpoenaed from the companies, found that roughly $1 billion of that amount paid for surgeries to replace the devices, and the rest went toward post-surgical services like imaging and followup doctor visits.