Feds pursue reports of excessive cardiac stent use at Kentucky hospital

The U.S. Department of Justice has turned its attention to a Kentucky hospital in its ongoing quest to crack down on the excessive use of cardiac stents. Depending on the outcome, the action could threaten the bottom line of stent manufacturers who are struggling with a stagnant market. And hospitals fearing federal scrutiny may reduce the number of those procedures considerably.

Bloomberg reports that federal investigators have been looking into allegations of excessive cardiac stent surgeries at King's Daughters Medical Center in Ashland, KY, going back to 2011. An analysis conducted by researchers with Dartmouth College ranked the Ashland area fourth out of 1,768 regions in the country as far as the number of stent-related procedures per 1,000 Medicare enrollees in 2010, the article explained. King's Daughters in particular performed 28% more stent procedures compared to any other Kentucky hospital as of 2011 (the year its cardiac stent surgeries peaked), according to state records cited in the story.

A hospital spokesperson confirmed the rumored federal investigation and said that King's Daughters has lost business as a result and has had to lay off employees. What's more, the hospital faced a drop of more than 45% in cardiac catheterization procedures in fiscal 2013 after the investigation began, according to Moody's Investors Service data cited by Bloomberg.

Cardiologist Richard Paulus, who has since retired, is the specific target in the federal investigation. He denies wrongdoing, according to the story, which notes that King's Daughters' cardiac center is named after him. Separately, a patient is suing Paulus for allegedly giving him too many unnecessary stents between 2006 and late 2010. As the article points out, he is contesting the lawsuit in court.

Related federal investigations are underway in 5 states, Bloomberg noted, adding that at least 11 hospitals have settled federal charges that they billed CMS for unnecessary stent procedures.

Medical device companies from Medtronic ($MDT) to Boston Scientific ($BSX) and Abbott ($ABT) face a saturated market for cardiac stents in the U.S. and in Europe, and a lawsuit to stop abuse could have a chilling effect well beyond the intent, making cardiologists more cautious about the procedure overall. Those federal lawsuits come as a recent study from The New England Journal of Medicine calls for multiple cardiac stents to improve outcomes.

- here's the Bloomberg story

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