CMS instructed providers to review the Medicare National Coverage Determinations (NCD) Manual (section 20.8), which summarizes covered and non-covered indications for single-chamber and dual-chamber cardiac-pacing devices.  These guidelines have been the same since April 30, 2004, and the NCD Manual has no directions for the provider about the appropriate care setting (inpatient versus outpatient).


The RAC Demonstration reviewers could not resist these cases because the average payment for a pacemaker insertion ranges from $13,279 to $18,673, and the reimbursement for defibrillator implants ranges from $26,017 to $32,316. The RAC Demonstration also found a high overpayment rate that the CMS recently reported in MLN Matters Article SE1027 (


In addition to the $21 million in overpayments for cardiac pacemaker implantations mentioned above, CMS reported slightly more than $64 million in overpayments for cardiac defibrillator implants. The agency ranked this procedure as first for overpayments, and other cardiac pacemaker implantation as third.


Fighting Back


In spite of these noteworthy improper payment amounts, however, the key words in SE1027 are “per appeal.”


The ambiguity and inconsistency in the review process for cardiac pacemaker and cardiac defibrillator implants gave providers ammunition to fight back. They dug in their heels and fought for these cases to remain inpatient and worked through the appeals process.


The Heart Rhythm Society ( questioned the finding from the RAC Demonstration and challenged the reviewers, stating the possibility that the reviewers “were not qualified to make medical necessity decisions based on inconsistent judgments made across similar cases.”


The big questions that the CMS has not answered are these: How successful were providers in the appeals process?  Were the decisions overturned in their favor?


We may not need CMS to answer these questions if we look to the permanent RAC program. Neither pacemaker procedures nor defibrillator procedures have been posted for medical necessity review, which makes us wonder why the agency has delayed posting these procedures for medical necessity review. They would appear to be very attractive targets for the RACs since they posted more than $87 million worth of overpayments during the demonstration project.


On the Horizon


Apparently, this has been a learning process for the RACs. However, be assured that they will come away from the appeal process more knowledgeable, with a better understanding on the documentation needed to justify the medical necessity for an inpatient stay.


Eventually, these cases will come under RAC review because there is too much potential money for recoupment to let them get away. The RACs will return to these cardiac-device cases better prepared with practice guidelines to support the rationale for the take-backs.


Now Under RAC Microscopes


In the meantime, the RACs are getting comfortable with the other cardiac procedures approved for review.  They are reviewing the following DRGs for medically necessary inpatient procedures in all four regions:


DRG 249                      Percutaneous cardiovascular procedures; and

DRGs 253 and 254        Other vascular procedures


So, don’t plan on pacemaker and cardiac defibrillator cases making their way to Medicare’s inpatient-only list. Be prepared to justify in the medical record the appropriateness of the inpatient stay prior to the RAC review.


About the Author


Barbara Vandergrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn®), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.


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