Medical Device Warranty Credits With Al Brander| E. 55

How SpendMend's Explanted Medical Device Warranty Credit Tracking solution helps hospitals to avoid costly fees and penalties.

 

 

Episode Introduction 

 

In this episode, Lisa Miller, founder of VIE Healthcare and CEO of Spendmend ,and Jim Cagliostro, VIE’s Clinical Operations Performance Improvement Expert, interviewed Al Brander to explore in detail the challenges and financial risks of managing medical device warranties. Topics include the risk of ‘’Medicare fraud’’, how hospitals are throwing away cash, why financial and legal responsibility lies with the explanting hospital, and a detailed presentation on the compliance and revenue benefits of SpendMend’s innovative software solution. 

 

Show Topics 

 

Background to the Explanted Medical Device Warranty Credit Tracking solution

The risk-reward element that helps hospitals to avoid penalties and add revenue

The high risk of financial penalties for failure to comply

Mock audits are invaluable for hospitals in this low frequency/high risk areas

The simple shipping label that keeps vendors accountable

How SpendMend’s software provides audit defense

Understanding revenue benefits at a glance

 

Main Topics

 

04:43 Background to the Explanted Medical Device Warranty Credit Tracking solution

 

Al explained that when a device fails, hospitals have a responsibility to return it to the manufacturer to obtain warranty credits. 

 

‘’…there are all kinds of great implants that we put into people to make their lives better, the most common of which is a pacemaker, but there's all kinds of neural stimulators, total joints, all of these items. And so interestingly, all of them come with kind of a warranty. They're expected to last for a certain amount of time, but all of us have cell phones, so we understand that batteries and motherboards don't always last as long as they're supposed to. And so for years, CMS, the Center for Medicare and Medicaid Services, is the primary buyer of these things because most of them go into our elderly patients. And so CMS realized that "hey, we pay for the first device to get put in and then if it does fail, we pay for the second device to get put in and the hospitals are supposed to be sending back these devices, back to the manufacturer to see if there's a warranty." When the hospital gets that money, well really it's not their money, it's CMS’s money. And so the new standards came out in the late 2000's, actually. And what the expectation was is, when there's a device that fails, for whatever reason there's a malfunction or patient morbidity that happens because of that device, when it gets switched out, hospitals are expected to send it back to the manufacturer and pursue those warranty credits.’’

 

 

06:05 The risk-reward aspect that helps hospitals to avoid penalties and add revenue

 

Al said that hospitals could be literally throwing away cash by failing to return medical devices under warranty.

 

‘’In order to incentivize hospitals to do this every time, they've said, "Hey look, if that warranty credit is 50% or more of the replacement cost of that device, then send it back to us. But anything that's 49% or below you guys get to keep. We know we've paid for the full