Medical device giant, Medtronic Inc., is settling charges over kickbacks to doctors. The Fridley, Minn. firm has agreed to pay the United States $23.5 million to resolve allegations that it violated the False Claim Act by using physician payments related to post-market studies and device registries as kickbacks to induce doctors to implant the company’s pacemakers and defibrillators, the Justice Department announced December 12, 2011.
Yowzers, I really wouldn’t want to be the CEO of this company right about now!!
The company was accused of seeking physicians to participate in studies and registries and paying doctors fees of between $1,000 to $2,000 per patient for information and data collected as long as they used Medtronic’s devices, according to the Justice Department.
Medtronic caused false claims to be submitted to the federal healthcare programs Medicare and Medicaid, the Justice Department said. “Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers,” Tony West, assistant attorney general for the Justice Department’s civil division, said in a statement.
“Medicare and Medicaid beneficiaries depend on their physicians to make decisions based on sound medical judgment, especially when they are choosing which pacemaker or defibrillator to implant,” said B. Todd Jones, U.S. Attorney for the District of Minnesota. “Medical device manufacturers must not be permitted to use improper payments to cloud that judgment.”
“Today’s settlement highlights one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by unlawful payments,” said Benjamin Wagner, U.S. Attorney for Eastern District of California.
“Patients trust that decisions to implant certain pacemakers or other medical devices are based on their own health interests and not influenced by kickbacks,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “Companies distorting medical decision-making through kickbacks can expect that OIG investigators and our law enforcement partners will actively investigate and prosecute such unlawful conduct.”
“We are happy that the investigation is behind us so we can continue to design and execute clinical trials that generate evidence to improve patient care, outcomes and cost effectiveness,” said Medtronic spokesman Chris Garland.
The resolution comes as Medtronic is facing another probe by the Justice Department and the U.S. Senate concerning whether physicians paid by Medtronic neglected to report serious side effects of its spinal surgical product.
Late last year, Medtronic was in under investigation due to Medtronic payments to a group of spine surgeons at a Louisville, Kentucky hospital, that raised questions about possible kickbacks. From 2004 through 2008, the group from Norton Hospital performed the third highest number of spinal fusion surgeries on Medicare patients. In the first nine months of the prior year, the surgeons were paid $7 million from Medtronic.
The payments were presented as royalties the surgeons received for helping Medtronic design a spinal fusion product. Medtronic says it does not pay surgeons royalties on devices they use in their patients, thereby removing any financial incentive for them to do more surgeries than necessary, the Wall Street Journal said last year.
These allegations are nothing new for Medtronic. Over the past several years, they have been involved in lawsuits that alleged consulting agreements with surgeons were actually kickbacks to induce them to use the company’s products.
Sounds to me like this company may need to consider a better marketing strategy, or from the looks of it, they will be paying out more of these settlements in time to come.