November 01, 2013
The coincidental timing of a new government report and a recent lawsuit show that some medical device companies just don’t get why it’s not a good idea for doctors to have financial arrangements with medical device companies.
In a recent report, U.S. Department of Health and Human Services Officer of the Inspector General finds – not so shockingly — that one in five spinal fusion procedures were performed at hospitals that bought their spinal surgery equipment from distributors owned by doctors. “Taken together, these factors may increase the cost of spinal surgery to Medicare over time,” states the OIG report “Spinal Devices Supplied by Physician-Owned Distributors: Overview of Prevalence and Use.”
Then, in a brazen complaint (which some might consider an admission), the owner of a medical device company is suing HHS for warning that device companies risk violating the anti-kickback statute by offering surgeons the option of owning a piece of device distributorships.
He claims that he has lost substantial business since the warning. Thus, he complains essentially that his products aren’t competitive in the market unless he gives the surgeons using them a bonus kicker for each device they use – which is exactly what the HHS OIG found to be a problem with decisions about spinal fusion procedures.