Medicare spent $1.5 billion and patients spent $140 million as a result of just seven recalled or failed cardiac devices, spending that could be better controlled if unique device identifiers (UDIs) were required on CMS claim forms, according to a report by the HHS Office of Inspector General (OIG).

The next version of the CMS form due to be released for comment on Dec. 1, and if UDI information is not included in this round of updates, device-specific information couldn’t be included until the “end of the next decade,” Inspector General Daniel Levinson said.

The OIG said the Centers for Medicare and Medicaid Services does not receive enough medical device-specific information from claims data to properly identify and track Medicare costs related to the replacement of recalled or defective devices.

Failed devices of all types cost Medicare billions of dollars and often harm patients both physically and financially, a problem that could be addressed by better documenting which patients receive which devices, the report said.

The report recommended that Medicare claim forms be revised to include the device identifier portion of the UDI for implantable devices. This would help identify recalled or defective devices more quickly, identify the costs to Medicare for those devices, keep patients safe and protect them from unnecessary costs, and safeguard Medicare trust funds, the OIG said.

Jay Crowley, vice president of UDI Services and Solutions at USDM Life Sciences, said the report represents “a new wrinkle in the ongoing discussion about the utility of UDI to CMS and what problems it would cause.”

Big Change

On the one hand, he said there would be an “enormous cost” associated with requiring UDI. “To require UDI for implantable devices changes a whole bunch of things, and implementing those things wouldn’t be easy,” he said.

However, Crowley added that FDA officials and others also see benefits “to the kind of granularity that UDI provides.”

The OIG noted the effort and expense required to find out which patients had received the failed or recalled cardiac devices, and then to determine which patients had received replacement devices.

“I think the OIG is pointing out that there are benefits to capturing UDIs for implantable devices that could save CMS money,” Crowley said. “We have to get over the hurdle of doing it.” The hurdles include, among other things, changing claim forms and updating systems and processes.

“Getting through all that and figuring out what we’re going to capture and what it’s going to look like is part of the challenge,” he said. “I think the problem for CMS is that there are significant costs to doing this and someone at the department or congressional level has to decide this is worth the investment.”

Still, Crowley predicts the changes will be implemented eventually, perhaps in five to eight years. “These things take a long time, but I think it’s going to happen,” he said.

The next time you hear about UDIs, it may be from an FDA investigator. Implementing UDI is a huge challenge. That's why FDAnews developed the new management report Unique Device Identifier (UDI) Rule Implementation and Compliance Guide.