The Role of Coverage Policy in the Abandonment of Low Value ICDs
Discussant: Aditi P. Sen
Since 2005 Medicare has stated that it will not pay for implanting defibrillators in patients who recently had a heart attack or revascularization procedure. Several randomized trials show that defibrillators do not improve survival in such patients. Following a 2010 False Claims Act lawsuit, the Department of Justice started investigating hospitals for implanting defibrillators in patients who do not meet Medicare coverage criteria.
Using 100% inpatient and ambulatory discharge data from Florida, we estimate that the lawsuit resulted in a 7% decline in defibrillator implantations, saving insurers over $500 million annually or almost $20 billion in present value. These savings dwarf the $273 million in damages that the Department of Justice recovered from hospitals. A large share of the savings accrued to private payers, suggesting physicians do not have separate treatment thresholds for privately-insured patients and Medicare beneficiaries. We conclude that coverage policy plus enforcement is a powerful tool for reducing the use of low value care.