Feds Make Hip/Knee Replacement Deal

Probe Of Alleged Kickbacks To Surgeons Leads To Fines, New Rules & Monitoring

(CBS/AP)  A federal investigation into concerns that kickbacks were influencing decisions to do hip and knee replacement surgery has led to an agreement between the government and five companies which between them manufacture nearly 95 percent of the replacement joints implanted in the U.S.

Christopher J. Christie, U.S. Attorney in Newark, N.J., says the five companies "avoided criminal prosecution over financial inducements paid to surgeons to use their products" by agreeing to new corporate compliance procedures and federal monitoring under 18-month agreements with the Department of Justice.

Christie says no individuals have been charged in the investigation, which is continuing.

Of the five companies involved in the agreement, all but one will be paying hefty fines, which add up to $310 million.

The companies are: Biomet Orthopedics, fined $26.9 million; DePuy Orthopaedics, fined $84.7 million; Smith & Nephew, fined $28.9 million; Stryker Corporation, which will not be paying any money; and Zimmer Holdings Inc., which will pay $169.5 million and be monitored by former U.S. Attorney General John Ashcroft.

The amounts the companies are paying are based on market share and are part of civil settlements with the Justice Department including more monitoring, allowing them to continue to be part of Medicare reimbursements, and protecting them from any civil lawsuits based on conduct revealed in the investigation.

Christie says Stryker voluntarily cooperated with investigators, before any other company did, and as a result was able to enter into a Non-Prosecution Agreement with the government.

The other four companies were named in criminal complaints accusing them of violating federal laws against kickbacks. Under the terms of their agreement with the government, the complaints will expire if they are successful in following the new rules during the 18-month monitoring period.

Authorities say the companies paid orthopedic surgeons exorbitant amounts of money to be consultants and exclusively use their products. Patients and hospitals, says Christie, were not informed of the doctors' relationships with the manufacturers.

Some doctors were paid "hundreds of thousands" of dollars, says Christie, noting that only a minority of the consulting contracts companies had with surgeons were improper.

"This investigation uncovered evidence that health care decisions were being made based on a doctor's wallet and not on a patient's well-being," said Weysan Dun, the agent in charge of the FBI's New Jersey division.

The U.S. Department of Justice began investigating the industry in 2005 regarding concerns that companies may have paid kickbacks to orthopedic surgeons in return for favoring their products.

In July 2006, another medical device maker, Medtronic Inc., agreed to pay $40 million to settle civil allegations that it paid kickbacks to doctors. The allegations dealt with its Memphis, Tennessee-based subsidiary Medtronic Sofamor Danek, which makes implants used in back surgery to stabilize a patient's spine.

The government said that between 1998 and 2003, Medtronic paid kickbacks that included sham consulting fees, bogus royalty payments and trips to tourist destinations. Medtronic denied any wrongdoing in the settlement.

Biomet, of Warsaw, Indiana, was acquired Tuesday for $11.4 billion by a consortium of private equity firms and ceased trading on Nasdaq.

DePuy, also of Warsaw, Indiana, is a unit of New Brunswick, New Jersey-based health care giant Johnson & Johnson. Zimmer is also based in Warsaw, Indiana.

London-based Smith & Nephew has its U.S. orthopedics operations in Memphis, Tennessee.

Stryker is based in Kalamazoo, Michigan.

[tucano2]

So what is new? Nothing. AMERICAN physicians traditionally have placed greed far above appropriate treatment.

[drivelphobe]

"healthcare decisions were being made based on a doctor''s wallet and not on a patient''s well-being". Well isn''t that original. This goes on every day in every physician''s office and every hospital. The biggest scam of all is treating the healthy with the so-called "preventive care" logo. Just observe the billing practices, referral kickbacks, and length of treatment determination in the hospitals. It''s all about maximizing the medicare and insurance company payouts without regard for the patient at all. When you''re in the hospital, count how many specialists drop by to "check" on you, for about $300 per 60 second visit. It''s moden medicine at it''s finest. Doctors are about the same as body shop owners, using every trick to over bill the patient and fatten their wallets. Think for yourself when it comes to taking medicines and "following doctor''s orders". They only want the money.

[lucy-in-tx]

I live in Texas and have been unable to find a private orthopaedic surgeon because most - repeat MOST - do not accept state medicaid, which makes me wonder how much some - repeat SOME - orthopaedic surgeons in TX do receive as kickbacks since TX state medicaid will not pay but a fraction of the outrageously overbilled charges some of them charge... which is why they will not accept adult medicaid in the first place.

[barbaraf4]

No more kickbacks? Does Bush know about this agreement? Will he still get his?

[Krazcarl]

What I got from this was a finacial inducement to use there product not bogus syrgery I''m om my third artificail hip over 15 years and wouldn''t be walking without it and able to live a semi-normal life.

[slim1h2o]

This investigation uncovered evidence that health care decisions were being made based on a doctor''s wallet and not on a patient''s well-being," said Weysan Dun, the agent in charge of the FBI''s New Jersey division

This story confirms what I''ve been saying for months, that doctors only care about their wallets, not their patients. The FBI needs to investigate my old doctors, and UNC