Pappas Capital Announces the Passing of…

Monmouth Junction, NJ (August 20, 2012): Medicare’s decision to stop reimbursing hospitals for the treatment of potentially avoidable surgical site infections following cardiac implantable electronic device (CIED) procedures, including pacemaker and defibrillator implants, will significantly impact hospital practices according to a new national survey of hospital chief financial officers (CFOs).

The Centers for Medicare and Medicaid Services (CMS) recently released its Hospital Inpatient Prospective Payment System (IPPS) Final Rule for Fiscal Year 2013 which adds Surgical Site Infection following CIED implantation as a condition subject to the Hospital Acquired Condition (HAC) payment provision. CMS considers these infections to be reasonably preventable and has classified them as complicating conditions that would otherwise result in higher payment to the hospital. Under the new policy, CMS will pay for the original implantation surgery, but will not reimburse hospitals at a higher rate for treating the infection. 

The survey polled 50 hospital CFOs at academic health centers and community hospitals across the United States to determine how hospital practices are likely to change as the result of the new CMS rule. Findings included:

• 62% of CFOs consider the financial impact of the HAC on their hospital’s operations to be “very important.”

• Nearly all CFOs had adopted or plan to adopt new technologies to help reduce the risk of CIED infections; half those surveyed specifically cited increased use of the AIGISRx®Antibacterial Envelope.

• 82% of CFOs plan to use internal reporting measures to reduce the incidence of the CIED infections.

• 74% of CFOs believe their facilities may reduce the use of CIEDs when alternative therapies are available.

• Only 6% of hospital CFOs said their organization had not taken any actions to reduce the incidence of existing HACs.

Patients with surgical site infections following CIED procedures spend an average of two extra weeks in the hospital, undergo repeat surgical procedures to treat the infection, and cost the facility an average of $72,485. Additionally, such patients experience significant increases in morbidity and mortality, with 1-year mortality rates of 26.5 – 35.1%, depending on device type.

“Surgical site infections are expensive to treat and have a significant financial impact on hospitals as well as on patients’ health and wellbeing,” stated Robert White, Chief Executive Officer of TYRX, Inc., the leader in the commercialization of implantable medical devices intended to help reduce surgical site infections (SSIs). “New technologies, such as the AIGISRx® Antibacterial Envelope, can play an important role in reducing the incidence of such infections and thus lowering hospital costs.”

The survey, conducted by Epocrates, was sponsored by TYRX, Inc.