Doctors Accused Of Kickbacks By Whistleblower
27 CommentsBy Ed Silverman // July 31st, 2008 // 8:53 am
This is one way to get a doctor’s attention - file a lawsuit charging the doctor colluded with a device maker and accepted kickbacks to defraud Medicare. And a whistleblower suit filed in federal court in Boston does just that - approximately 120 neurosurgeons and orthopedic surgeons, and several distributors, were accused of conspiring with a unit of Medtronic, which two years ago paid $40 million to settle charges that kickbacks were paid to docs to get them to use spinal products.
The whistleblower suit was filed by two former Medtronic employees, Jacqueline Poteet (see photo), a former senior manager of travel services at Medtronic in Memphis, who filed an earlier whistleblower lawsuit that led to the 2006 settlement, and Bobbie Vaden, who worked in Medtronic’s accounting department in Memphis. (Back story). They allege the docs purchased Medtronic Sofamor Danek products and fraudulently submitted claims to Medicare for reimbursement. The Justice Department, however, declined to join.
Their suit also charges improper off-label promotion took place through “suspect clinical trials performed by financially interested physicians, withholding of adverse data, publication of favorable off-label data and studies authored by highly compensated docs,” and promotion at continuing medical education seminars. Poteet and Vaden go on to say that millions of dollars were paid to the docs during 2006 alone, and many received similar “sham” payments during the two preceeding years as well.
The kickbacks occurred in the form of consulting fees, bogus royalty payments, research grants and fellowships, free travel and lodging, entertainment and gifts, according to the suit. “These bribes and kickbacks distorted and continue to distort the defendants’ medical decision-making, cause overutilization of MSD products, increase costs and result in unfair competition by freezing out competitors who are unwilling to pay kickbacks,” they allege.
They also detail a scheme involving patents awarded and huge consulting fees paid to certain doctors, who appeared at CME seminars in an effort to expand the use of a spinal implant device known as Infuse by allegedly promoting a risky off-label procedure. Another allegation involved flying docs from around the country to a Memphis clinic where off-label procedures were displayed. One doc at the clinic was paid $27 million in consulting fees between 2001 and 2006, and received several patents.
The complaint has a couple of juicy examples - take a look. But beyond specific allegations, an interesting issue raised here is that the whistleblowers and their lawyers decided to target the doctors - lots and lots of them. This, effectively, puts doctors across the country on notice. So what do you think?
Should doctors also be targeted for fraud?
- Yes (89%, 180 Votes)
- No (11%, 23 Votes)
Total Voters: 203
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Paul G
It was about time!
Although not exonerating the device companies, clearly doctors have been a big part of the nonsense that’s been going on.
Over my years, I have encountered lots of them who could care less about the patients and have their hand out demanding money or goodies at every turn.
Takes two to tango. I don’t believe that it all started with companies offering stuff to doctors, but the other way, doctors asking and expecting stuff from companies — and companies providing as necessary to do business.
Insider
Ha ha!
The start of a trend - I wonder?
Dan
Jaaqueline Poteet, one of the whistleblowers, initally was not going to be acknowledged as a whistleblower because she was not first to file the suit. Yet it appears that the DOJ decided that her contributions had enough merit to be included in the lawsuit, after her legal agents filed a motion to the DOJ regarding this matter.
Been There
Buying business! It’s the Big Device and Big Pharma way! Has been for a long, long time. Despite efforts to curb it, it continues. BTW, it’s the companies that initiated it and then the doctors got used to it!
Just another reason why....
health care costs continue to skyrocket!
Think about it….who makes money (big money) off of health care? Pharmaceutical companies, insurance companies, medical device manufactures, and (let us not forget)our policy makers whose campaigns are funded by the big 3. The docs are merely jumping on the band wagon! Shame on them all!
Ditto
I am a hospital administrator over surgery. I review any available research when we receive a surgeon request for new technology specifically looking for outcomes. There is a huge amount of products that have no research or poor research. The outcomes can not be evaluated. We can however evaluate the cost. We have denied the purchase of technology because of possible conflict of interest and many times the surgeons are not aware of research supporting a product. So what is it that gets their attention?
Spine Supplier
Couldn’t be happier about this lawsuit! From the standpoint of a competetive implant supplier, in one of the largest (and highest-paid) concentration of Medtronic “consultants,” I hope this will eliminate conflicts of interest and finally create a fair market. All I ask is that we all operate on a level playing field, free of docs being bought & paid for in exchange for their business.
ExSpine rep
I quit working in the Spine device market recently becuz of this kind of stuff (may have been the same market as one mentioned). Being honest and ethical cost my family dearly, I wouldn’t play the game and got squished like a bug. I was #1 salesguy in the nation in another industry, got my clock cleaned for being naive here. Hope they go to prison, both Docs and Reps/Distributors alike.
R Rende
Many of the academic doctors are obviously crooks. Obviously, the medical societies have lost all control over their members. These doctors should be indicted.
Spinemaster
And you wonder why Medtronic easily dominates the spine market?? It’s pretty smart as long as they keep getting a mere slap on the wrist. What’s a fine of 40 million dollars to a multi-billion dollar company?? Can you say chump change! Nothing will change until the fines actually hurt. Medtronic is shady and buys alot of business!
Notso Fast
Anybody ever heard of innocent until proven guilty?
no need
That last post must have been written by a Medtronic sales rep…
INDA KNOW
This is company is in utter turmoil on many levels.
If you are on the inside you will understand. If not, realize that the Infuse association to this suit is not primarily relevant to the real issues. It is wrong to go after the surgeons on this basis. Infuse use on and off lable is highly effective in healing patients.
My comment on this issues is as follows:
Sofamor Danek (MSD)created the blueprint for buying surgeons support. They did it for years with tremendous success. In todays market, no company can do the same and achieve to that level of success. There are too many players slicing the pie to earn a return on their $$. SDG (MSD today) flat out offered and delivered gifts of value to surgeons who were loyal or could be key opinion leaders to the world of spine. This was the way to grow market share and meet quota year after year at 30% growth or better.
For the last 3-4 years MSD has implemented damage control to atone for SDG’s sins. It’s called ADVAMED. Mr. Art Collins so artfully helped to create a society for medical devices to live in. Kudos to you Mr. Collins. Let’s keep all of those 2000 dollar dinners and lap dances for under the rug.
Back to MSD.
Doug King took hold of the sales reigns approximately 5 years ago.
What a Genius. Medtronic scored big here with the elevation of Mr. King to the ranks of Management. Mr. King realized at some point that the monolithic giant MSD was capable in ‘ steering the spinal implant ‘ market in any way he desired. . Why with its 1000 man sales team it had created new and exciting market niches to peddle its wares. After all, the stockholders want to see significant returns on their investments right ?
It is this pressure that resulted in moves on behalf of MSD to once again fire up the engine of marketing to surgeons costly implant technologies that offer very little benefit to patients at a costly premium to patients, insurance companies, and oh yeah…. the government.
Specifically : Agile - PEEK ( plastic )rods system- Prestige - Maverick Lumbar Discs- Cannulated screws -HA coated screws -
How do we do this Mr. King ?
We lower sales commissions on the ‘older’ systems that cost less, introduce ‘ New Technologies’ as stated above that cost thousands more. Then, and here is the hook….. Raise commissions to the sales force on the New and more costly spinal implant technologies to sell to doc’s. Oh by the way. There is virtually NO clinical studies showing that the new tech. additions to the sales bags actually work better than the old ones with the exception of the prestige Disc.
Arrogance. Pure arrogance on the part of MSD and Mr. King. If we build it, they will sell it no matter how much it costs. Oh, by the way one of these systems actually ‘hurt’ patients and failed in vivo. The Agile system was pulled by MSD from use and recalled for breaking in patients resulting in a second surgery to fix the problem in most cases. Maverick has not seen the light of day. Thank god.
I can easily go on for ever with my thoughts here.
I will close by saying that indeed SDG (MSD) paid doctors for their support for years. Look not toward that for for a case for injustice to patients and defrauding the government.
The real injustice to day is far more important.
The spinal implant arm of the company (MSD) has placed profit ahead of introducing implants that offer a real benefit to healing patients.
Incentivized its reps to sell these inferior (unproven clinically) technologies at a tremendous premium.
We are Medtronic.
If we build it, surgeons will use it….
ortho pro
This guy/gal is right on. With INFUSE, Medtronic has actually attempted to purchase the standard of care, which is an unfortunate example of evil and greed that has caused plenty of permanent damage.
In spine surgery, fusion doesnt necessary equal success, and I would encourage any patient requiring spine surgery to research infuse, and ask your spine doc exactly how it is going to be used in your procedure.
Thousands of patients wish they had.
ExSpine rep
I think we must look at the ADVAMED sham for what it is. DOJ was starting to look at what was going on in spine so DePuy and Danek (the biggest culprits in kickbacks) decided to form ADVAMED as a very clever diversionary tactic that just bought them some time. When they formed this mastermind plan claiming how they were going to be such ethical good guys and be the vanguard for other companies to look up to, they were just carrying on in the biggest portions of their shenanigans and probably laughing it up in meetings when discussing the DOJ. The comment about only $40M is an understatement, puny is inappropriate, a joke is more to the truth.
Let me ask you, if you knew you would only get fined $40 (and not get in any more trouble than the fine), had no ethical compass to speak of, and you would make a $140 profit on a $2 investment,how long would you withstand that offer. Hope the rest of this massive iceberg get played out and we get to see the perp walks on national TV.
Geez it seems life is not fair, duh….
Whitness
I work in a hospital in Louisville, KY, Norton Healthcare, one of largest (if not the largest) hospitals in the state. Our primary spine practice, Leatherman Spine Institute, is run by 6 orthopedic spine surgeons, all of which were named as some of the highest paid consultants by Medtronic. It’s pretty much known that the relationship between Medtronic, and the practice’s chief surgeon, John Johnson, is highly… This is probably the highest profile spine practice in Louisville, and the state of Kentucky. Is it any coincidence that these 6 surgeons collect over $1 Million per year in “consulting fees” and Norton Healthcare spends nearly $20 Million per year with medtronic???? Can you say “conflict of interest?” I mean, come on… These surgeons won’t even look at another vendor, won’t even consider the possibility… these moves are being made well above the head of our medtronic sales rep, we routinely have executives from memphis at the hospital, finding creative ways to “engage” our surgeons… It’s such an obvious act of collusion, and the shame of it is that these doctors are in charge of training the University of Louisville’s orthopedic (spine) residents and 5 fellows each year… its a medtronic factory, and trust me, it is WELL WORTH the investment of $1.2 million per year, to see $20 Million in return, plus the 100% exposure of your products to 5 fellows and 3-4 spine residents year in and year out… I hope our hospital and these surgeons realizes its time to distance themselves from medtronic… i have a sneaking suspicion that our local newspaper is going to run a story on this whole thing too
;-)
Spine Rep
I have been in the healthcare field for over 13 years as a Registered Nurse and Sales Representative. My territory is a smaller market that does not have any of these so called “Kickback Physicians”. If you think Medtronic is this evil machine that produces bogus products for profit then you are sadly misinformed. The surgeons that I work with make educated decisions on what products and technologies they use to treat their patients. I personally know a number of patients who have benefitted from these so called unproving devices, i.e. PEEK Rods.
Now the subject of Infuse. If Infuse has not made a positive impact in treating patients over the past several years then don’t you think we would have seen it come out in the journels? I’m not saying that there hasn’t been cases were patients have reacted differently, but from a percentage wise it is small. It’s not that it isn’t a safe device, as much as the added cost to the procedure. Would you rather have them cut into your hip and take the bone? Take a look at how many companies have jumped on biologics bandwagon due to the success of Infuse. Infuse is the most studied biologic option on the market.
If you think Medtronic is this big machine that is corrupting healthcare then you must not know anyone who works for the smaller companies. I have had opportunities to jump ship but believe in what I represent. I have seen first hand how other companies flat out lie about their products to compete with our products. No matter how much you “might” have paid a couple surgeons to say how great something is, doesn’t make somebody use a product. If you produce a quailty product and have a well educated sales force that understands the pathology then you are going to be successful. You ask any spine representative who they would want to work for and I believe the would say Medtronic. We make less on commision then alot of companies but we get to represent a company that invest alot in research and development, medical staff education, and quality products.
We live in a country that is full of greedy lawers who drive the costs up on everything we do and consume. The amount of money and time that is invested to bring a technology to the market is enormous. The cost of malpractice insurance is insane. There is alot of things that need to change with our healthcare system. The money is drying up and everybody is scrabbling for their morsel.
It all comes down to this… we are in a time when everybody involved needs to take a look at the future of healthcare in America and step up to the plate. The big money days are over and we need to work together so that we all can benefit from technologies that will better our lives.
Regards,
Drunk On Corporate Koolaid
Whitness
I don’t think Medtronic is a monster, however, I do think they walk a very thin line when it comes to how they “engage” surgeons… These practices clearly aren’t used in every situation, or we would see a thousand surgeons listed in this legal document. They picked some interesting battles when it came down to who was a priority though… if you look at the surgeons in louisville, memphis, st. louis, and minneapolis, you will notice that they are all tied to large teaching institutions where they can gain access to many residents and fellows… great ROI for the few million they shell out every year… They have good products, and infuse is a great product, when used where it should be used (ie - not in the cervical spine)… And you’re right, medtronic probably isnt half as shady as a lot of the small companies running around, doing anything they can do make a sale, but they are the biggest, which comes with the biggest target on their back.
ExSpine rep
With all due respect to your 13 years in the field, you obviously work for one of the smaller companies and don’t compete in the big leagues. I have numerous surgeon friends who from an insider’s view say that it is so out of control with the payola that anyone that doesn’t have an iron will and strong ethical compass will cave in to the bribes. At meetings they will talk about how to play the companies off each other and how to not get caught. It is pretty easy to avoid detection.
Spine rep dude, like it or not, all the claims presented by every one of 65+ spine companies are bogus, the product offerings are basically generics with outrageous claims about how theirs is better. They are all good, all work just fine and the real product differentiation comes down to what extra$$ will be delivered with their products.
Medtronic is a monster indeed, of the most dangerous sort. They put profits above patient safety to put money in the bank. Simple greed is no news, but this isn’t like kickbacks on a road construction project, its human beings lives.
Infuse is a liquid that will seep into surrounding tissue and grow bone, a lumbar or thoracic plif or tlif puts it in bad spots and it means they are playing Vegas odds with patient health. (Yes take ICBG for my family)
How would you feel if a family member of yours got some and it turned them into a parapalegic. Anyhow, an ACDF you can spit in and it will fuse, BMP is stupid there.
Medtronic is no worse than Blackstone and Globus to be sure, no better either.
INDA KNOW
Spine Rep,
You state
” If you think Medtronic is this evil machine that produces bogus products for profit then you are sadly misinformed. The surgeons that I work with make educated decisions on what products and technologies they use to treat their patients. I personally know a number of patients who have benefitted from these so called unproving devices, i.e. PEEK Rods.”
Tell me please. What studies show PEEK Rods are any better than a 5.5 diameter rod for achieving arthrodesis (fusion). There are and were NONE as Medtronic introduced the PEEK (plastic ) rod system.
Oh, one major difference. The PEEK Rods are twice as expensive. In a time when Medtronics core metal business is being nipped away daily they create a new unproven system to make twice the profit. At the same time they virtually threaten reps to sell these or else you end up on the ‘ bad rep ‘ list. By the way only time will tell how the Plastic rod patients are doing. Remember 5.5 rods have been used for decades with long term success. Too bad they cost 3 times less and are not as profitable to Medtronic today.
Lets not forget the Agile System introduced at the same time. New, Sexy, Expensive! It BROKE in patients backs !!!! They kept it on the market for a long time and had no shear testing to tell if it could break in patients backs???
WTF ?
LOL
Whitness
unhappy rep,what are the Dr’s paying hospital adm….get over it , this seems personal
ExSpine rep
“what are the Dr’s paying hospital adm” good point, I always forget that there is often more than meets the eye. The hospitals that cry the blues about how much money their not-for-profit hospital is losing, then they spend many millions of $ building huge new facilities and fancy renovations. They seem to have huge “profits” that get pumped back into pet projects.
How do they do their accounting? Anybody know ? Like, do they pay $100, bill ins/medicare $700, collect $400 and say its a loss of $300 or a break even when duh, they made a $300 profit or 300% cash on cash return?? There is a pretty dark side to US healthcare systems in general.
Spine Rep
Peek rods where designed to not stress shield the interbody graft and let Wolff’s law take place. The design is based of our 3.6mm dia. Ti rod which showed great fusion rates pre Infuse. The construct is designed to have the 80% anterior/20% posterior axial load of a normal spine. Just because a list price is set high doesn’t mean that is what it is sold for.
They did not keep selling Agile once the reports came in that there was a problem.
As far as Infuse, it does not leak out of the collagen sponge into the surrounding tissue if it is properly prepared. READ THE DIRECTIONS.
Why wouldn’t a company educate surgeons on their products and provide a safe environment for them to train?
Like I said before, it is up to everyone to step up to the plate and make sure the most important factor is taking care of first..THE PATIENTS.
INDA KNOW
SPINE REP,
Are you saying that a 3.6 titanium rod is OK to use in the lumbar spine ?
Say… Like Vertex Max ( posterior cervical/thoracic application only ?
And, did that show great fusion rates in the Lumbar spine ?
The answer is NO. No one would ever do that.
How can you compare your ‘great fusion rates ” with 3.6 rods and PEEK rods ? They are not ever used in the same area of the spine. The Lumbar spine is subject to massive loads in many directions.
If thats your contention you need to travel back for another 3 weeks training in Memphis.
It is ludicrous to think a 3.6 rod Ti would not break. Sure I know PEEK NEVER breaks. It does flex. Down onto the graft and…. OOPS ! It goes up too. Therefor can interfere with Wolfs law and actually unload the graft.
5.5 Titanium screws with a properly sized graft has decades of proof to promote fusion. Just compress the graft in the normal fashion and you are done. No need for $8,000 worth of special screws.
The resulting unchecked flexion and extension of the vertebral bodies can do the Exact opposite to aid in fusion. Right ? Motion is the enemy of arthrodesis ( fusion ).
Agile absolutely was sold for after reports came in. There may have been significant lack of response and spin put on this…
As for Infuse…
Lookie here– http://online.wsj.com/public/page/2_1566.html
Medtronic Spine makes the front page. READ THE ARTICLE
Why wouldn’t a company educate surgeons on their products and provide a safe environment for them to train?
Justice in Michigan
Inda Know - Just want to thank you for your informative, detailed posts. You obviously have been there. Your info is greatly appreciated.
INDA KNOW
Infuse Info :
http://badmedicaldevicesblog.com/2008/09/04/medtronic-infuse-bone-graft-linked-to-life-threatening-complications/
Front page in link above has info removed.
ExSpine rep
Spine rep says:”As far as Infuse, it does not leak out of the collagen sponge into the surrounding tissue if it is properly prepared. READ THE DIRECTIONS.”
Gee, I must have been halucinating when I saw infuse dripping from the sponge on the back table.
Guess the collagen material is the ShamWow for spine and behaves much different than tall other collagen sponge materials on the planet.
Yah, a sponge would probably never let the liquid leak out into the canal if you put it in the body.
What a fool I must be to think that could happen.