Physician Kickbacks: Los Angeles Attorney Comments On NYT Article

On March 4, 2009, the New York Times reported that Federal health officials and prosecutors "plan to file civil and criminal charges against a number of surgeons who they say demanded profitable consulting agreements from device makers in exchange for using their products." The article states that "[f[or years, prosecutors rarely pursued doctors because they believed that juries would sympathize with respected clinicians."

According to the article, officials are "frustrated that they have been unable to stop illegal kickbacks to doctors from drug and device companies, are investigating doctors who take money for using these products." The article reports that as part of plea bargains , drug and device makers are being required "to post publicly all payments made to doctors who serve as consultants or speakers." One can imagine that some state and/or federal officials will then seek to proceed against the doctors.

Besides legal fees, settlement amounts, potential jail time and fines, doctors and health care providers convicted in the cases could lose their licenses for a time and be excluded from the federal Medicare and Medicaid/Medi-Cal programs, severely limiting their potential pool of patients. See:
http://www.nytimes.com/2009/03/04/health/policy/04doctors.html

Commentary: Our own review of the Department of Justice budget shows a commitment of resources to health care prosecutions and we expect an increase in these cases. In part, this is a reflection on the budgetary pressures on federal and state governments. In January, Eli Lilly agreed to pay a record fine of $1.4 billion to settle federal criminal charges that it illegally marketed Zyprexa. Pfizer also announced it had set aside $2.3 billion to pay an expected fine over charges that it illegally marketed Bextra, a painkiller that has been withdrawn from the market. Government officials will likely see huge fines from public corporations and seek significant fines against non-public providers as well as part of this process.
We see cases that have been referred for "criminal investigation" that are routine audit cases or referral arrangements that have been regarded as common in the marketplace and which never would have been referred 3 or 4 years ago. Providers are under a microscope and need to ensure they are compliant with all rules and regulations in their marketing and consulting arrangements.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates. They focus a significant part of their practice on cases involving marketing compliance, allegations of kickbacks or illegal referral fees, and related issues involving health care providers and other professionals.