DoJ Steps Closer to ICD Settlement, May Be Good News for Devicemakers
The outlook for companies making implantable cardiac defibrillators (ICDs) may have just gotten a bit brighter, as the U.S. Department of Justice (DoJ) took a significant step toward closing out its investigation of off-label use of ICDs in U.S. hospitals.
On Aug. 30, the department began emailing a document to hospitals that lays out specific scenarios of ICD usage that would not be covered by Medicare and discusses whether DoJ would enforce penalties against the hospitals involved in each situation.
DoJ initiated the investigation after a January 2011 Journal of the American Medical Association study found that 23 percent of ICD implantations fell outside of recommended guidelines.
“DoJ appears willing to resolve its investigation reasonably,” Wells Fargo Securities analyst Larry Biegelsen wrote in an Aug. 31 note. Any downward impact to the U.S. ICD market will likely be limited because implant practices have changed as a result of the investigation, with hospitals more aggressively screening against Medicare billing for off-label use, he predicted. Biegelsen previously said that publicity around the investigation has also changed physician behavior.
Last year, the device industry paid the DoJ close to $1.8 million due to its stepped-up enforcement campaign to curb off-label marketing and violations of the False Claims Act.
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