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MINNEAPOLIS – Sept. 21, 2009 – Medtronic, Inc. (NYSE:MDT), today announced the full U.S. launch of the KYPHON Cement Delivery System (CDS), adding an innovative bone cement delivery option to its extensive KYPHON Balloon Kyphoplasty product portfolio for the treatment of vertebral compression fractures (VCFs). (more…)

BY LAUREN UZDIENSKI, JULY 16, 2009

According to the Report on Medicare Compliance, the DOJ is conducting an investigation into Medicare inpatient claims for kyphoplasty at hospitals nationwide. The probe stems from a whistleblower lawsuit from two former Kyphon sales and reimbursement managers who claimed that the company encouraged hospitals to admit kyphoplasty cases as inpatient to increase hospital reimbursement, though the procedure is usually performed on an outpatient basis. CMS pays between $12,000 and $15,000 for an inpatient kyphoplasty, while outpatient kyphoplasty pays in the range of $2,500 to $4,500.

The DOJ will be looking at claims from January 1, 2000 through December 31, 2008. The inquiry will require hospitals to demonstrate the medical need for an inpatient procedure, such as comorbidities, with the DOJ noting that hospitals will have to prove that the “absence of inpatient care would have significantly and directly threatened the patient’s medical condition, safety and health.” Certain justifications for inpatient treatment have already been challenged by the government as invalid, including post-surgical physical therapy, CT scans and the delivery of IV antibiotics as well as patient pain.

Regardless of the scope of the review, there is some indication that any outcomes may be difficult to enforce. CMS, the AHA in its ICD-9 recommendations and admission screening organization InterQual have all suggested that kyphoplasty is justifiable as an inpatient procedure in typical cases. One lawyer close to the investigation calls it a “crock” and asserts, “This shouldn’t be a fraud case.”

The whistleblower suit that sparked this probe was settled in 2008 with a $75.0 million payment to the U.S. from Medtronic. When that case was resolved, the plaintiffs filed a similar suit against hospitals.