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Early Alert: Incorporating Medical Device-Specific Information on Claim Forms

We alerted CMS to the preliminary results of our ongoing review of the costs Medicare incurred because of recalled or defective medical devices. Our ongoing review shows that the lack of medical device-specific information in the claims data impedes the ability of CMS to readily identify and effectively track Medicare's total costs related to the replacement of recalled or defective devices.

Current health insurance claim forms include only the procedures performed and a field for reporting device failures and recalls. Therefore, we are unable to determine from the claims data alone specific devices that have been implanted or whether replacement devices were the result of a device recall or a device failure. (CMS would encounter this same impediment.) To determine this, we had to subpoena manufacturers to obtain lists of beneficiaries who received recalled or failed devices and review beneficiaries' medical records. Specifically, we subpoenaed information and reviewed medical records for beneficiaries related to seven devices that had been recalled or that had high failure rates. For these seven devices, we established complex audit procedures and preliminarily identified $1.5 billion in Medicare payments and $140 million in beneficiary copayments and deductibles for services and procedures associated with recalled or failed devices.

We believe that this early alert provides important information that policy makers should take into consideration as they contemplate revisions to the claim forms and that CMS should collaborate with the Accredited Standards Committee X12 process to include the device identifier (DI) portion of the Unique Device Identifier (UDI) for implantable devices on the next version of the claim forms. The Food and Drug Administration and CMS recently took an important step and co-signed a letter that supported capturing the DI portion of the UDI on the claim forms for implantable devices. The inclusion of the DI could assist in identifying the costs to Medicare for recalled or defective medical devices, help ensure patient safety, and safeguard Medicare trust funds.

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Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201