False Claims Act (FCA) liability arise when a hospital bills Medicare for items or services that violate CMS’ National Coverage Determinations’ coverage requirements. This was the basic allegation in a recent 500-hospital FCA recovery, which returned $250 million to the federal government. By stepping forward, the qui tam relators received a whistleblower reward of more than $38 million.
Medicare coverage is limited to items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury. A National Coverage Determination (NCD) is a nationwide determination by CMS that Medicare will pay for a particular item or service. Oftentimes, the NCD will include certain coverage requirements that must be met before the item or service will be considered medically “reasonable and necessary.”
For instance, in the above case, the 500 hospitals allegedly submitted claims for cardiac devices that were implanted in Medicare patients in violation of NCD coverage requirements. Specifically, the Medicare coverage for implantable cardioverter defibrillators (ICDs) provides that the devices should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. According to the government, the settling hospitals prematurely implanted ICDs in Medicare patients.
While it is easy to be dismissive of such NCD coverage issues, it is important to remember that NCDs are specifically crafted to ensure effective care and patient safety. As the government stressed in announcing this landmark FCA recovery, the ICD coverage requirements were, “based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates.” In turn, the whistleblowers who expose hospitals that ignore NCDs are standing up for patient safety.