Washington Times Examines Results of Federal Investigation Into Alleged Physician Kickbacks

A settlement to end a federal investigation into alleged kickbacks to U.S. physicians by five companies that manufacture artificial joints "is shining light on hundreds of agreements under which surgeons across the country receive trips, meals and consulting deals from artificial-hip and -knee makers," the Washington Times reports.

According to federal officials, four hip and knee replacement companies paid about $800 million to doctors from 2002 to 2006. Medical device makers Biomet, DePuy Orthopedics, Smith & Nephew and Zimmer Holdings last year agreed to pay a combined $311 million to settle a federal investigation over allegations that the companies paid kickbacks to doctors to recommend their products. As part of the settlement, the four companies were required to make their consulting arrangements with physicians public. A fifth company, Stryker Orthopaedics, cooperated early in the investigation and paid no fines but agreed to reveal its consulting arrangements.

The Times reports that despite the settlement, the investigation has not closed. Michael Drewniak, a spokesperson for U.S. Attorney for New Jersey Christopher Christie, who initiated the investigation and approved the settlements, said that federal officials continue to look into "particular doctors and their conduct." Drewniak added, "It was never our suggestion that for all of the doctors who received compensation, that the compensation was unlawful. Most of them were quite legitimate compensation packages for research or product development and/or royalties for products."

According to the Times, some observers are concerned that kickbacks might result in physicians opting for more expensive devices for patients, which drives up health care costs, especially for Medicare. More than half of the nation's 700,000 hip and knee replacements are performed on Medicare beneficiaries. Paul Ginsburg, president of the Center for Studying Health System Change, said, "In theory, the physicians are using their best judgment about what's best for the patient, but, to the extent they're given these consulting arrangements, it's something that could clearly distort their incentives."

Supporters of the consulting arrangements say they allow doctors and medical device makers to collaborate, resulting in important advances in technology. Tony Rankin, president of the American Academy of Orthopedic Surgeons, said, "I think doctors do what's best for the patient."

The Times also examined similar concerns about medical device makers in the spinal surgery field. Charles Rosen, clinical professor of Orthopedic Surgery at the University of California-Irvine School of Medicine and president of the Association for Ethics in Spine Surgery, said, "In orthopedics in general, it seems like it's become almost commonplace to get money for a company as a consultant, just as long as you continue to use their product and write favorable things about them." According to Rosen, colleagues targeted him after he spoke out in favor of mandatory disclosure of consulting arrangements. Rankin said that orthopedic surgeons agree with disclosing the consulting arrangement but added his organization prefers that people know what the payments are for. Rankin said, "We think transparency is important. We disagree with the way disclosure was done, which is without context" (McElhatton, Washington Times, 3/18).