Recalled Devices Create Problems for CMS

CONFERENCE NEWS: MDMA ANNUAL MEETING

CMS wants to reform how it pays for replacements of recalled devices, a top official told MDMA members at its annual meeting in May.

Traditionally, CMS has paid for replacements of recalled devices in full. However, hospitals often get replacements from device manufacturers at little or no cost, said Herb Kuhn, the agency's acting deputy administrator.

“How do we capture [the actual cost to the hospital]?” he asked. “Right now, we don't discount for that, even if the hospital gets the replacement at no cost or does not pay the full value on the diagnosis-related group (DRG). We need to revise the payment to something that's fair and appropriate.”

Right now, Kuhn said, there is no way to code for that, but if bar coding or another unique device identification system is implemented, that mechanism could possibly be used to alert CMS that the device is a replacement for a recall and should not be reimbursed at full value.

Kuhn also said that CMS is concerned about “a new kind of recall: a device that is not explanted but for which there is concern. The recall notice asks physicians to see these patients on a more regular basis. That increases the frequency of interaction. Who should pay for it? We would like to learn more about this issue.” He suggested that it might be addressed the next time CMS engages in proposed rule making.

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