A 2018 report from the Office of the Inspector General noted that payments reviewed for recalled cardiac medical devices did not comply with Medicare requirements for reporting manufacturer credits. Medicare incorrectly paid hospitals $7.7 million for cardiac device replacement claims, resulting in potential overpayments of $4.4 million.

In recent years, manufacturers have recalled several cardiac devices. Often, the manufacturers offered replacement devices without cost to the hospital or offered credit for the replacement of a more expensive device. In some cases, manufacturers paid unreimbursed expenses for Medicare beneficiaries who needed replacement devices implanted through a warranty package. Hospitals receiving cardiac devices at no cost or with credit must use proper modifiers or condition codes when submitting claims, so Medicare only reimburses the reasonable cost of the device and no overpayments occur.

Manufacturers issued reportable credits to hospitals for recalled cardiac medical devices, but, according to the report, hospitals did not adjust the claims with the proper codes or modifiers to reduce payment as required. The Centers for Medicare and Medicaid Services (CMS) developed the Medicare Billing for Cardiac Device Credits fact sheet to help ensure proper reporting of manufacturer credits for cardiac devices and avoid overpayment recoveries.

Keywords: ACC Advocacy, Federal Government, Centers for Medicare and Medicaid Services, U.S., Medicare, Medicaid, Health Expenditures, Hospitals

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