Abuses Charged in Pacemaker Surgery : Need for 30,000 of 110,000 Operations Questioned at Hearing

Charges that nearly a third of heart pacemaker surgery “may be unnecessary” and that hundreds of millions of dollars in Medicare outlays are lost annually as a result of continued “waste, fraud and abuse” in the industry were discussed Friday before the Special Senate Committee on Aging.

The committee, which held a hearing on progress in carrying out reforms imposed in the last two years, has turned up “a Pandora’s box full of crooked manufacturers, greedy doctors and defective products,” the group’s chairman, Sen. John Heinz (R-Pa.), said as the session opened.

A report by the committee’s staff questioned the need for as many as 30,000 of 110,000 first-time pacemaker implantation operations expected this year, as well as another 21,000 operations for replacement of pacemakers that have already been implanted. Both figures were based on estimates.

400,000 Have Pacemakers

About 400,000 Americans, most of them elderly, are dependent on pacemakers, which are used to regulate the timing of heartbeats, and about 140,000 Medicare beneficiaries are expected to undergo pacemaker implant and replacement surgery this year at a total cost of $1.4 billion, the report said. The total includes 21,000 to 30,000 replacement operations, which it said are expected to cost Medicare about $200 million.

The report attributed much unnecessary surgery to “physicians’ poor understanding of electrocardiography and cardiac arrythmias (heartbeat irregularity).” Physicians taking specialty examinations in these areas “exhibit the highest failure rate in the field of cardiovascular disease--yet these are skills required to make judgments of the need for pacemaker insertions,” the report said.

The report said the payment system now used by the Health and Human Services Department to reimburse hospitals under the Medicare program “provides incentives for hospitals to ‘double dip’ from both Medicare and a pacemaker manufacturer” for the devices.

Hospitals Collect Twice

It said the system permits hospitals to collect warranty credits from manufacturers for pacemakers that have been removed from patients and returned, and to collect full payments for replacement surgery, which includes the price of a new pacemaker.

The staff report noted that the Justice Department last year successfully prosecuted two pacemaker manufacturers, Pacesetter Systems of Sylmar, Calif., and Telectronics of Englewood, Colo., for paying kickbacks to physicians to induce demand for pacemakers. Even so, it said, there is evidence of more sophisticated abuses, including phony consulting arrangements between physicians and an unnamed firm.

Also disclosed by the report was a Food and Drug Administration finding that the Cordis Corp. of Miami, one of the world’s largest pacemaker manufacturers, had sold 6,000 old-model pacemakers for three years after its development in 1980 of an improved model that used a device to protect against premature battery failures. The FDA inquiry began in 1983 after the agency received a copy of an internal Cordis report on premature battery depletions that the company initially had tried to withhold.

The report said that, as of Feb. 1, 1984, 270 patients using old-model Cordis pacemakers had died but that “prior to this inspection, no effort had been made to determine if the recognized pacemaker early battery-depletion failure mechanism could have resulted in a patient death.”