Are doctors getting fees or 'bribes'?
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So far this year, Pittsburgh-area orthopedic doctors and institutions have received up to $2.82 million in consultation fees from the country's five largest makers of artificial knees and hips -- the type of fees that the U.S. Justice Department asserts could be kickbacks, intended to encourage the regular use of the companies' medical products.
But those same Pittsburgh surgeons and medical institutions say their compensation is commensurate to the level of consulting and research work they've done for the companies.
As part of the Justice Department investigation, several U.S. orthopedic firms have produced lists of their consultants and the payments they have received in 2007. Below are links to those lists, plus agreements reached in the case.
The consultant lists:
The non- / deferred prosecution agreements
In September, four of the five largest U.S. orthopedic firms agreed to pay $311 million in fines to settle a three-year Justice Department investigation into whether the companies -- Zimmer Inc., DePuy Orthopaedics, Biomet Inc. and Smith & Nephew -- conspired to violate federal anti-bribery laws.
One of the conditions of that deferred prosecution agreement was that, within a month, the companies produce a list of all of their consultants and the payments they have received in 2007. Those names, and payments, were released last week. (The fifth company, Stryker Orthopaedics, has also released a list of its paid consultants, but was not named in any of the criminal complaints because it cooperated with the federal investigations early on.)
The companies, in separate statements, have admitted to no wrongdoing. Both the companies and the surgeons with whom they collaborate said some of the fees are royalties for doctors who helped invent and conduct clinical trials on experimental products; others are payments for those experts who advise the manufacturers or teach others how to implant the devices, or are reimbursements for "reasonable costs."
"The academy certainly believes in disclosure," said Dr. James H. Beaty, president of the American Academy of Orthopaedic Surgeons. But "we believe that the collaboration has to be done" to yield new devices that benefit millions.
Neither the Justice Department nor U.S. attorney's office prosecutors have suggested that all, or even most, of the payments were of the kickback variety. Nonetheless, some of the payments look extravagant on their face, one of the factors that drew the attention of federal investigators in the first place.
In Pittsburgh, Dr. James D'Antonio, of Greater Pittsburgh Orthopaedic Associates, has received $850,000 to $875,000 through the first 10 months of 2007 from Stryker. On his extensive resume is the development of a new alignment system for artificial knee joints, femoral research, and two decades of experience in knee and hip replacements, performing them at several regional hospitals.
Most of the money received this year, more than $600,000, was for royalties on intellectual properties he helped to develop.
"I could do a lot more surgery if I didn't do this for Stryker," Dr. D'Antonio said in a phone interview. He also said that he's not beholden to Stryker's products because of the fees he collects.
"I use other implants," he said. "I don't hesitate to use other companies for a minute," if they carry a product he feels is better suited for a surgery.
Stryker spokesman Aaron Kwittken, meanwhile, said new guidelines governing the interaction between surgeons and manufacturers, which arose out of the settlement, will help to "level the playing field" among the manufacturers.
"The entire sector will benefit," he said.
Implicit in the remark is the feeling that different manufacturers were playing by different sets of rules, in how they compensate surgeons. "Clearly, the government must have had a concern," Mr, Kwittken said, but he wouldn't elaborate on what concerns, if any, Stryker has.
Payments to other Pittsburgh area physicians include:
• The Orthopaedic Group of Pittsburgh received $75,000 to $100,000 this year from Smith & Nephew, and two of its doctors, Ari Pressman and Allan Tissenbaum, received individual fees. Smith & Nephew reported paying the same range of fees to Carnegie Mellon University, and to Carnegie Mellon professor Dr. Jeffrey O. Hollinger, a bone tissue regeneration expert.
• Biomet has a relationship with the University of Pittsburgh Medical Center's Department of Orthopaedic Surgery, through Dr. Freddie H. Fu and Dr. Christopher Harner, paying $75,000 to $100,000.
• DePuy's largest payment went to Dr. Lawrence Crossett, a UPMC surgeon who has received $250,000 to $275,000. On Dec. 6, he's scheduled to perform two knee replacement surgeries, which will be broadcast over the Internet by DePuy and viewed by doctors.
• Zimmer, the largest of the joint manufacturers, paid out the most to Pittsburgh doctors, $1.16 million through Oct. 31.
Together, the nonprofit clinic and health provider AMD3 and its founder, Dr. Anthony M. DiGioia III, received at least $437,000 from Zimmer. Dr. Dana Mears, a renowned joint replacement researcher and pelvic expert with Greater Pittsburgh Orthopaedics Associates, received $112,500 this year. Dr. Nicholas G. Sotereanos, a local expert in geriatric orthopedic services, received $226,000, Zimmer said.
"As an independent physician, I am not rewarded by either the hospital or the implant company for using any specific products," Dr. DiGioia said. He is not "obligated or rewarded to use any of Zimmer's products."
Zimmer also paid $52,000 to UPMC. Spokesman Frank Raczkiewicz, on behalf of UPMC and its surgeons, said in a statement that "at UPMC, the use of a particular device is determined by the physician based on what is best for the patient. Funding that UPMC receives from Zimmer is used for research."
Still, even the appearance of impropriety is troubling, said Dr. Barbara Barnes, a UPMC vice president and associate dean at Pitt's medical school. That's why the school and UPMC plan to release a revised code of ethics for doctors next week, set to go in effect in 2008. The code will govern interaction between doctors and representatives from the pharmaceutical and biotech industries, forbidding doctors from accepting most gifts, trips and freebies.
Research money from the biotech industries can be a blessing, but also a potential ethics land mine. "Seeing the largesse of the [biotech] industry, we recognize the need to establish guidelines" and for industry transparency, Dr. Barnes said.
The American Academy of Orthopaedic Surgeons' code of ethics, approved in December 2004, says "when an orthopaedic surgeon receives anything of significant value from industry, a potential conflict exists which should be disclosed to the patient ... it is unethical for an orthopaedic surgeon to receive compensation of any kind from industry for using a particular device or medication."
The academy's president, Dr. Beaty, said in a statement that "there is no place for illegal and unethical arrangements where compensation to a physician greatly exceeds the value of the services" rendered, but added in a phone interview that he personally isn't aware of any inappropriate relationships between surgeon and manufacturer.
In all, according to the statements from the five companies, more than $200 million has been paid to doctors, clinics and university health systems across the country this year. Zimmer Holdings has so far paid out $85.8 million; DePuy, $48.8 million; Stryker, $27.8 million; Biomet, $19.6 million; and Smith & Nephew, $19.3 million.
The companies are required to update the payment information quarterly, and soon will be required to divulge nonmonetary transactions with doctors, such as gifts and free trips. In criminal complaints, the companies admitted paying surgeons consulting fees that violated the federal Medicare Fraud Statute, which prohibits companies from offering "inducements" to doctors who participate in Medicare, according to The Star-Ledger newspaper in Newark, N.J.
About two-thirds of the 700,000 knee and hip replacement surgeries performed each year are covered by Medicare.
Such practices are not unprecedented. For years, federal investigators and Congress have examined how pharmaceutical companies "market" their drugs by way of lunches, gifts and donations to education funds, to encourage doctors to prescribe them. In June, the Senate Special Committee on Aging heard arguments for and against federal legislation that would require drug companies to disclose payments and gifts to doctors.
First Published November 7, 2007 1:07 am