Whistleblowers rake in heart-stopping $38M in cardiac device FCA settlements

Almost 500 hospitals have agreed to pay the United States over $250 million to resolve allegations that they violated the False Claims Act (FCA) (31 U.S.C. §3729 et seq.) by implanting cardiac devices in violation of Medicare coverage requirements. The Department of Justice announced the agreements, which involve 70 settlements and 457 hospitals spanning across 43 states, and represent one of the largest whistleblower suits and most significant FCA recoveries in the country. The settlements arose from a single lawsuit filed by two whistleblowers who have received a whopping $38 million under the FCA’s whistleblower provision.

Cardiac devices

The settlements involve the implantable cardioverter defibrillator (ICD), which is an electronic device that connects to the heart. The ICD detects and treats life-threatening heart rhythms, known as fibrillations, by delivering a shock to the heart to restore the heart’s normal rhythm. It is similar to an external defibrillator, but it is small enough to be implanted in a patient’s chest. Only certain patients who have specific clinical characteristics and risk factors qualify for Medicare coverage for an ICD.

Medicare coverage

A National Coverage Determination (NCD) governs whether the device, which costs approximately $25,000, will be covered by Medicare. CMS implemented the NCD based on clinical trials and guidance from various cardiac health care providers, professional cardiology organizations, and device manufacturers. According to the NCD, there should be a waiting period before ICDs are implanted in patients who recently suffered a heart attack or who had heart bypass surgery or angioplasty. The purpose of the waiting period is to allow the heart the opportunity to improve function on its own so that an ICD may not be required.

Qui tam lawsuit

The hospitals were alleged to have implanted ICDs from 2003 to 2010 during periods that were prohibited by the NCD. Most of the hospitals involved in the settlements were named in a qui tam lawsuit brought by two individuals under the whistleblower provision of the FCA (31 U.S.C. §3730), which allows private citizens to file lawsuits on behalf of the government for violations of the statute and to share in any resulting recovery.