Why Is Your Process For Reporting Medical Device Credits Falling Short?

Written by: Joe Heminger, Business Development Manager

So, why is your process for reporting medical device credits falling short?
The Office of Inspector General (OIG) performed a review of cardiac device credits to determine whether hospitals complied with Medicare requirements for reporting manufacturer credits associated with recalled or prematurely failed cardiac devices.
In November 2020 OIG issued a report detailing that for every 3,233 of the 6,558 Medicare claims that were reviewed, hospitals likely did not comply with Medicare requirements associated with reporting manufacturer credits for recalled or prematurely failed cardiac medical devices.
OIG concluded that hospitals would continue to struggle with compliance because of the following consistent areas of difficulty:

  • Billing Systems – Health billing systems are not consistently updated to reflect the changes from 2014 regarding new condition and value codes. Hospitals that have made updates to their systems are not using the code when updating the UB-O4 on original or resubmitted claims.
  • Lack of Written Policies and Procedures – Health systems either have inadequate or non-existent written policies and procedures or do not enforce the current policies that are in place.
  • Insufficient Communication – Health systems suffer from a lack of interdepartmental communication when receiving reportable claims. The audits show that hospitals are submitting25% of the credits on time from the original claim and 81% on the 90-day resubmission.
  • Inadequate Compliance Testing – Health systems lack internal resources and/or expertise.  In addition, they are far too inconsistent at collecting the data both from the facility and the vendors.
  • Vendor Involvement – Health systems relied upon the vendor to manage the device return and credit process which resulted in gaps.

For insights and advice on how to address these common areas of failure and construct a fully compliant process for reporting manufacturer device credits – contact SpendMend today.

Should I Send All Explanted Devices Back to the Vendor?

During last month’s webinar we hosted (click here to watch) about the steep fines hospitals are facing due to Medical Device credits and the confusion surrounding the status of warranties for certain devices an attendee posed the questions: Do you have to send every explanted device back? What if you read and interpret the warranty on your own?

This topic fired up our panel of experts and had me thinking what is the best practices way of handling an explanted device that may or may not be under warranty?

Christina Dawson, Materials Coordinator for Dignity Health St. Joseph Cath Lab, explained that the only time she doesn’t send a device back is in an end of life scenario. Al Brander, former CNO and OR director, agreed and said he sent back all devices and let the vendor decide the warranty status to avoid any risk. Colin Ramsey, Business Consultant, Cardiovascular Service Line for Sharp HealthCare agreed and said, “We started sending all devices back and we found a device that we had originally marked as no credit did have a credit. So, after that happened, we now send a hundred percent of all devices back.”

It seems that even the most well intention and researched warranties are difficult to understand due to the legal jargon used. Rather than spending your staff member’s time researching and reading the fine print according to this expert panel the best practice for explanted devices to avoid fines and penalties is to send all devices back to the vendor to ensure a proper credit or no credit is given.

If you want to skip ahead to this section of the recording you can find it at 34:30.