Medical Device Data, UDIs on Claims Impact Costs, Patient Safety

October 03, 2017 - Adding medical device data and unique device identifiers (UDIs) to insurance claims could have a significant positive impact on healthcare spending and patient safety, according to reports from Pew Charitable Trusts, Brigham and Women’s Center of Surgery and Public Health, and OIG.

However, most insurance providers, including Medicare, do not have the data collection methodologies in place to gather this valuable information, leaving providers, patients, and payers at risk for adverse outcomes.  

“The ability of CMS to effectively identify and track these costs is essential to assessing their impact on the Medicare trust funds and Medicare beneficiaries,” OIG said.

During an audit, OIG found that Medicare spent over $1.5 billion dollars to recall and replace certain medical devices. The process also cost around $140 million in beneficiary copayment and deductible liabilities related to recalled and prematurely failed medical devices.

“By including medical device-specific information on the claim forms, CMS could more effectively identify and track Medicare’s aggregate costs related to recalled or prematurely failed devices,” OIG said.

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“This could help reduce Medicare costs by identifying poorly performing devices more quickly, which could also protect beneficiaries from unnecessary costs and improve their chances of receiving appropriate follow up care more quickly,” the agency added.

Actively adding UDI and medical device info to claims can also help public payers, private health plans, and hospitals further evaluate the cost of devices and find cost-effective devices that don’t negatively impact care quality, according to Pew.

“This information can help identify when lower or higher cost products may be clinically appropriate, doing this can also improve patient outcomes and safety,” Pew said.

Adding device identifiers to insurance claims may also help the healthcare system determine when a device should be recalled while establishing the best way of recalling that device.  

“If the device information is more broadly available to payers in the future, some thought should be given to who will be responsible for contacting affected patients should a recall be required: the manufacturer, healthcare system, implanting physician, payer, or all working in together,” Brigham and Women’s said.

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Convincing payers, providers, and other stakeholders to use UDIs maybe a challenge, since they are not required to do so currently. Providers only have to use the established UDIs required by Congress in 2007, and payers aren't required to have a form field on claims to record further device data.

“Although claim forms include a field for reporting specific codes for recalls, premature device failures, and no-cost replacement devices, hospitals rarely used this field because CMS required them to use it only if they received reportable credits or no-cost replacement devices from manufacturers,” OIG said.

The team from Brigham and Women’s also suggested that a challenge to effectively utilizing device identifiers comes from a lack of a centralized place to share and record device data.

Capturing adequate amounts of device data would require a system that can obtain data from multiple sources, link the data to their devices, and make it available to stakeholders.

“Ideally, such a system has access to the results of all procedures involving implanted devices so that valid comparisons can be drawn among competing alternatives and a timely warning can be raised in case of a device defect or failure,” Brigham and Women’s added.

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Providers could add UDI information to EHRs and then transfer that information through the UDI2Claims project, Brigham and Women’s suggested.

The project streamlines device data through barcoding and EHR data fields. That data is then sharable with a patient’s payer.

“We are confident that the processes we have described above for capturing the DIs of implanted devices into the patient's EHR, and ultimately transmitting them to the insurance claim and then to the payer, will work,” Brigham and Women’s said.

“Our confidence stems from the following: the existing method for capturing UDIs of implanted devices data into the patient’s Implant Record after the device is implanted, the established method for including data in the header portion of the universal claim form and transmitting it to the payer, and the straightforward custom process designed to read the device information in the Implant Record and place it on the claim form.”

OIG believes that CMS can create an in-house solution alongside the Accredited Standards Committee X12 to add device identifiers and make it a requirement for hospitals and providers with Medicare.

“We recommend that CMS continue to work with X12 to ensure that DI is included on the next version of claim form, and require hospitals to use condition codes 49 or 50 on claims for reporting a device replacement procedure if the procedure resulted from a recall or premature failure independent of whether there was a device provided at no cost or with a credit.”

Pew added that policy has moved in the right direction in 2007 and more can be done within Congress to address enhanced UDI.

“Congress can help address gaps in claims data with the addition of information on the manufacturer and model of device implanted, particularly for products that are more likely to cause harm, Pew said.

Payers that begin to do this can get ahead in data sharing and claims analysis that prevents billions in overspending while protecting beneficiaries’ health from poorly functioning medical devices.