DOJ Implantable Cardiac Defibrillator Investigation

Navigant Played Critical Role in Large Scale, National Investigation

In March of 2010, the U.S. Department of Justice (DOJ) sent out 12 Civil Investigative Demands (CID) to 12 inpatient healthcare facilities/companies across the country. These CIDs contained mandatory requests for electronic and paper documents, medical records, related to several thousand Medicare beneficiaries whom had been the recipients of a surgical procedure known as an Implantable Cardiac Defibrillator, or ICD. In addition to patient specific documents, the CID also demanded from each company any and all documents related to teaching and training of key medical, clinical, billing and coding personnel associated with teaching, training, dissemination and oversight of compliance with Medicare rules, laws and regulations in general but also specifically related to National Coverage Decision (NCD) 20.4. Subsequent to the DOJ dissemination of the CIDs to the first 12 healthcare companies, in May of 2010 non-CID “requests for information” were sent to an additional 480 individual healthcare entities across the U.S.


Medicare has a series of “levels” of rules and regulations intended to tell providers and federal contractors how to administer the very complex Medicare program. Among the very highest order of these rules are what is known as a National Coverage Decision, or NCD. There are approximately 300 NCDs and they are promulgated by the Centers for Medicare and Medicaid Services (CMS) the federal agency tasked with the operation of the Medicare program in the U.S. NCDs are focused on specific items, services, and devices and are intended to define specific, and perhaps unique, factors under which Medicare will reimburse providers. NCDs are often reserved for very costly services, such as an ICD, or services that have very high volume in the Medicare program. NCDs are specifically intended to define the precise medical, clinical and circumstantial patient characteristics when Medicare will, or some cases will not, consider a provided service “covered”, or payable, under the Medicare program.

NCD 20.4 was first promulgated by CMS in 1986 and defined two narrow clinical circumstances when Medicare would deem the implanting of an ICD covered. Over the course of the next 19 years, NCD 20.4 had additional clinical criteria added expanding the circumstances under which CMS would reimburse providers for an ICD implantation to a total of 9 categories. CMS also developed a process for providers to follow associated with the implantation of ICDs known as the ICD registry. The Registry was developed and maintained by a CMS contractor and required providers to enter various clinical data, post patient discharge, which would allow CMS to perform post payment reviews of various clinical elements that are relevant to determining compliance with NCD criteria and are not data available on electronic claim, which typically is the only source of information readily available to CMS. Submitting information to the ICD Registry for certain ICD cases became a condition of payment in 2005.

Prior to the initiation of the DOJ Audit of ICD cases, CMS had conducted no audits themselves of any ICD claims, raised no issues to specific providers that the NCD was not being followed correctly, nor denied any ICD claims.

The ICD investigation was initiated by a Qui Tam, whistleblower, who brought information to DOJ about specific healthcare entities which were not complying with NCD 20.4. This consultant had direct knowledge of this non-compliance as she was a paid consultant at these institutions in areas that, among others, dealt with compliance of NCD 20.4.  However, this consultant also worked with a data analyst and engaged in data mining to identify additional entities with potential cases in non-compliance, to which she did not have direct knowledge.

As a result of the data mining, approximately 160,000 ICD cases at approximately 500 hospitals were identified and targeted by DOJ for review. An average ICD case reimbursed hospitals at approximately $30,000. At the outset of the investigation, the DOJ felt that potential monies that had been overpaid to healthcare entities for ICD cases by CMS was approximately $5B.

Navigant was contacted by attorneys representing three of the first 12 healthcare companies and very quickly got involved in the national investigation. As more hospitals and law firms where brought into the investigation, the number of entities Navigant represented grew. Of the approximately 500 hospitals involved, Navigant represented over 250 at various stages.


The work involved a variety of work streams and areas of expertise. The vast majority of our work involved a very detailed review of a patient medical record to synthesize from them the relevant medical and clinical factors that were crucial in understanding to what degree the patient case did, or did not, comply with the NCD or was medically appropriate. In this area, Navigant reviewed over 3000 individual ICD cases and became the foremost expert and authority, not only to our clients but also by the DOJ, on the factors that determined compliance with the NCD.

Perhaps the greatest role Navigant played, for the entire investigation, was the development of a model/methodology to categorize individual ICD cases for purpose of settlement. The issue being the NCD 20.4 is a very difficult document to interpret and apply to a given patient circumstance. There are a tremendous amount of subjective aspects in an individual patient episode that required expertise and skill to assess. The greatest challenge facing DOJ was how to analyze such a large volume of highly complex medical cases in a way that was consistent and could use hundreds of different reviewers, yet generally come up with a consistent categorization of cases. The other major challenge was that the NCD was greatly lacking in language that addressed a wide variety of medical conditions that, from a professional standpoint, warranted ICD implantation, but by the strict interpretation of the NCD, would not have been covered by the NCD.

So, Navigant developed a highly sophisticated model that allowed a wide variety of reviewers to analyze medical records and record results in a consistent manor. The Navigant model also developed a series of very precisely defined medical criteria, or conditions, that helped add greater specificity and differentiation to those categories in the NCD, these became known as “the buckets.” The practical outcome of Navigant’s role in this area is that once our model was developed, reviewed and approved by DOJ, the model was then given by DOJ to ALL other hospitals in the investigation with instructions to “FOLLOW THIS” in their review of their individual ICD cases.

Lastly, we also had statistical experts involved whom developed a series of statistical model analyses and approaches which were instrumental in helping client counsel, and the DOJ, evaluate methods to analyze hundreds of claims within a single corporate entity, that were typically made up of many individual hospitals.

What factors were unique about this investigation?

  • This was the first wide scale use of CID authority within DOJ that had been granted by the Holder Memo. In essence, this memo gave a quicker, lower threshold, process definition to circumstance when DOJ could issue a subpoena.
  • This was the first national case by DOJ that was focused on industry wide compliance with a National Coverage Decision.
  • This was the first national case by DOJ where the primary issue/questions were based on the medical necessity of the services that had been delivered.
  • This was also a national case by DOJ where issues of medical necessity across an entire industry, rather than technical rule compliance, where being prosecuted under the False Claims Act.
  • CMS had never before told the industry that it wasn’t following the NCD correctly. In essence, CMS was retroactively holding the industry accountable to a 19 year old rule that they had never audited or enforced, but suspected was not being correctly followed.
  • Virtually every one of the 500 hospitals agreed to and used the Navigant Settlement Model. (the model was never called the Navigant Model). All 500 hospitals agreed to a settlement.
  • In the end, DOJ started out thinking this issue/investigation was a $5B recoupment however the final settlement amount for all hospitals turned out to be $280M.


The Federal Government, primarily DOJ, OIG and CMS, are now putting hospitals on record that they will be held directly responsible, via the FCA, for the medical decision making of their medical staff. In other words, a physician can make a medical decision on whatever basis he/she wishes for a medical intervention in a patient without regard to whether or not such action does or does not comply with a Medicare coverage rule. However, a hospital has the responsibility to evaluate every medical service provided within its walls and validate that such service does, or does not, comply with applicable coverage rules PRIOR to billing of said service less they are affirmatively submitting a potentially False Claim.



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