February 04, 2014
With the threat of the Stark anti-kickback laws, companies have learned to disguise kickbacks paid to medical providers in various ways. CareFusion’s $40 million settlement with the Justice Department earlier this month raises the question of whether $11.6 million paid to a doctor’s company is a kickback or a coincidence, as highlighted by a Modern Healthcare article.
The government alleges in court documents that CareFusion concealed kickbacks by overpaying for services under two contracts it signed with Dr. Charles Denham’s company in 2008 as a way to influence the doctor’s work as co-chair of the National Quality Forum’s Safe Practices Committee.
Denham’s lawyer said the payment was for “an array of services.” In the settlement agreement with CareFusion, the government says that “CareFusion’s payments to HCC were made for the purpose of influencing Dr. Denham’s work as co-chair of the Safe Practices Committee and for the purpose of inducing Dr. Denham to recommend, promote and/or arrange for the purchase of CareFusion’s product, ChloraPrep, in violation of the federal anti-kickback statute.”
The Safety Practices Committee recommended that surgeons use a particular CareFusion product for skin preparation. However, “that recommendation was stricken before publication in part because Denham’s ‘inordinate’ interest in it raised suspicions among other patient-safety experts, and the evidence showing ChloraPrep was better than similar products on the market wasn’t conclusive,” according to Modern Healthcare. The National Quality Forum severed ties with Denham, the magazine said.
Modern Healthcare reports that “Denham says he was surprised to see the U.S. Justice Department describe the money as kickbacks.” Denham’s attorney said that the government’s allegations are “blatantly false,” and it’s important to note that the doctor hasn’t been charged with any violations. But there are 11.6 million reasons why people might question whether his judgment was influenced by all that cold, hard cash.