Orthopedic Surgeons Have Received Billions In Kickbacks From Medical Device Makers

Medical Devices

An article by Fred Schulte and Elizabeth Lucas of Kaiser Health News, published on the Philadelphia Inquirer’s website, details how payments to spine surgeons may violate federal anti-kickback laws. In addition, these illegal payments have driven up health care spending and may seriously jeopardize patients’ health. 

In one such kickback scheme, the company SpineFrontier, maker of spinal surgical implants and related equipment such as titanium screws, is accused by the U.S. Department of Justice of paying surgeons who used SpineFrontier devices in hundreds of patients.

The DOJ suit, filed in March 2020, accused SpineFrontier and its CEO, Kingsley Chin, for illegally paying over $8 million to over 30 spine surgeons. The payments were characterized in the DOJ suit as “sham consulting fees.” Chin faces over a dozen related suits. 

DOJ alleges that many payments to surgeons by medical device makers have risen sharply, and many of these transactions may be illicit. The investigative Kaiser report says that the payments “come in various forms, from royalties for helping to design implants to speakers’ fees for promoting devices at medical meetings.”

It was well known for decades that pharmaceutical companies were making payments to doctors for prescribing certain drugs. As a result of this potentially-conflicting relationship, which research has shown can influence which drugs doctors prescribe, former President Barack Obama introduced the Physician Payments Sunshine Act (PPSA). The PPSA, enacted as part of “Obama Care,” stipulated that manufacturers of drugs, devices, and biological and medical supplies are required to keep a yearly report of all payments to physicians or physician-owned organizations over a cumulative value of $100. 

However, kickbacks from medical device companies to surgeons is much less publicized. 

A Kaiser Health News (KHN) investigation found that over $3 billion was dispensed to orthopedic surgeons from manufacturers of hardware for spinal implants, artificial knees and hip joints from August 2013 through the end of 2019. 

Surgeons who operate on bones and joints, comprise over 66% of U.S. doctors who earned over $1 million in compensation in 2020, data revealed, per KHN.

One critic of the kickbacks is Eugene Carragee, a professor of orthopedic surgery at the Stanford University Medical Center. Carrageee told KHN, “It is simply so much money that it is staggering.” 

And it’s not just the potentiality of illegal kickbacks that’s the problem. According to KHN reporting, whistleblowers and government investigators maintain that the practice is leading to surgeons performing unnecessary operations. 

In thousands of lawsuits, plaintiffs allege that they developed serious injuries, sometimes life-threatening and many times life-altering, as a result of defects in spinal hardware or hip implants.

When medical device makers have been hit with lawsuits, oftentimes, they will settle without having to admit wrongdoing. 

According to KHN’s investigative reporting, court pleadings reveal “more than 700 surgeons who have taken money, including dozens who pocketed millions in royalties or other compensation from 2013 through 2019.”

Six surgeons who received kickbacks from SpineFrontier, have, however,  admitted wrongdoing, and collectively paid over $3 million in penalties.

The market for orthopedic surgeries to fix back pain and replace hips and knees is worth some $20 billion a year. And the competition among medical device manufacturers is fierce, with over 250 companies clamoring to be the instrument of choice for surgeons. 

Whistleblowers allege that the Food & Drug Administration, the agency tasked with approving medical devices, “allows manufacturers to roll out new hardware that is substantially equivalent to what already is sold — though it often is marketed as more durable, or otherwise better for patients,” write the co-authors of the KHN investigative report. 

In other words, the newly approved products do not represent a breakthrough in technology. Rather, sometimes, the approved medical device is just a screw—and patients end up getting screwed over when it comes to paying the bill. 

The KHN co-authors write that hospitals can end up charging patients $20,000 or more for the materials, though they pay much less for them. Meanwhile, if you have spinal surgery, you’ll get a separate bill, and your spinal surgeon’s take home yearly pay will be approximately half a million dollars.  

This article was adapted from a longer version here, which details specific medical device lawsuits.

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