The Justice Department is reviewing whether charges to the federal government related to use of implantable cardio-defibrillators (ICDs) met with billing criteria set by the Medicare health program for the elderly, HCA said in a filing with the Securities and Exchange Commission.
The review will include billing and medical records at 95 of the company’s 163 hospitals from October 2003 to the present, it said.
ICDs are devices implanted in a patient’s chest to help regulate heart rhythm and protect against potentially dangerous racing heart beats.
HCA also said that in July the federal prosecutor’s office in Miami requested information on reviews assessing the medical necessity of certain interventional heart procedures. HCA said it believes such reviews have taken place at about 10 of its hospitals, primarily in Florida.
The reviews were conducted by third-party organizations retained by the company, an HCA spokesman said. The company said its own review of how many of its hospitals may be affected was not yet complete.
Interventional heart procedures include angioplasty and stenting used to clear and prop open blocked coronary arteries.
Jefferies analyst Arthur Henderson said such inquiries were not uncommon.
“Every time they come out, people get pretty nervous about it and the stocks trade down,” Henderson said. “There is not enough information to say this is going to end up bad. As long as the company continues to execute the way they have this quarter, I think there is some upside to the stock.”
Shares in HCA fell as much as 10 percent after the disclosures Monday, but regained some ground to close 4 percent lower at $25.55. Rival hospital operators also fell on news of the probes before recovering.
News of the federal probes comes as hospital operators are set to see higher admissions of insured customers as a result of President Obama’s health-care reform law that was recently upheld by the Supreme Court.
At the same time, pressure is growing on the U.S. health-care system to find ways to rein in costs that have contributed to a massive national deficit.
Recent studies have questioned the potential overuse of highly profitable interventional heart procedures in the United States, such as stenting and the placing of ICDs.