Device Makers Have Funneled Billions to Orthopedic Surgeons Who Use Their Products

https://khn.org/news/article/spine-surgery-implants-device-makers-orthopedic-surgeons-kickbacks/

Dr. Kingsley R. Chin was little more than a decade out of Harvard Medical School when sales of his spine surgical implants took off.

Chin has patented more than 40 pieces of such hardware, including doughnut-shaped plastic cages, titanium screws and other products used to repair spines — generating $100 million for his company SpineFrontier, according to government officials.

Yet SpineFrontier’s success arose not from the quality of its goods, these officials say, but because it paid kickbacks to surgeons who agreed to implant the highly profitable devices in hundreds of patients.

In March 2020, the Department of Justice accused Chin and SpineFrontier of illegally funneling more than $8 million to nearly three dozen spine surgeons through “sham consulting fees” that paid them handsomely for doing little or no work. Chin had no comment on the civil suit, one of more than a dozen he has faced as a spine surgeon and businessman. Chin and SpineFrontier have yet to file a response in court.

Medical industry payments to orthopedists and neurosurgeons who operate on the spine have risen sharply, despite government accusations that some of these transactions may violate federal anti-kickback laws, drive up health care spending and put patients at risk of serious harm, a KHN investigation has found. These payments come in various forms, from royalties for helping to design implants to speakers’ fees for promoting devices at medical meetings to stock holdings in exchange for consulting work, according to government data.

Health policy experts and regulators have focused for decades on pharmaceutical companies’ payments to doctors — which research has shown can influence which drugs they prescribe. But far less is known about the impact of similar payments from device companies to surgeons. A drug can readily be stopped if deemed harmful, while surgical devices are permanently implanted in the body and often replace native bone that has been removed.

Every year, a torrent of cash and other compensation flows to these surgeons from manufacturers of hardware for spinal implants, artificial knees and hip joints — totaling more than $3.1 billion from August 2013 through the end of 2019, a KHN analysis of government data found. These bone specialists make up a quarter of U.S. doctors who have accepted at least $100,000 or more, and two-thirds of those who raked in $1 million or more, from the medical device and drug industries last year, the data shows.

“It is simply so much money that it is staggering,” said Dr. Eugene Carragee, a professor of orthopedic surgery at the Stanford University Medical Center and critic of the medical device industry’s influence. Much of the money is deemed to be compensation for consulting duties or medical research, or royalties for inventing, or fine-tuning, new surgical tools and techniques. In some cases, it pays for trips or splashy junkets or rewards surgeons for promoting products to their peers.

Device makers say the long-established practice leads to higher-quality, safer products. “Doctors help develop and refine medical devices, and they even create new devices themselves, sharing their intellectual property with companies to help save and improve patients’ lives,” said Scott Whitaker, president and CEO of AdvaMed, the medical technology industry’s trade group.

But industry whistleblowers and government investigators say all that money changing hands can corrupt medical judgment and tempt surgeons to perform unnecessary and wasteful operations. In ongoing lawsuits, patients say they have suffered life-altering injuries from screws or other spinal hardware that snapped apart or live with disabilities they blame on defective knee or hip implants. Patients alleging injuries range from seniors on Medicare to celebrities such as Olympic gold medalist Mary Lou Retton, who had surgery to replace both her hips. The gymnast sued device maker Biomet in January 2018, alleging the hip implants were defective. The suit has since been settled under confidential terms.

The case of Chin’s company, SpineFrontier, is among more than 100 federal fraud and whistleblower actions, filed or settled mostly in the past decade, that accuse implant surgeons of taking illegal compensation from device makers — from surgeon entrepreneurs like Chin to marquee names like Medtronic and Johnson & Johnson. In some cases, device makers have paid hundreds of millions of dollars in fines to wrangle out of trouble for their involvement, often without admitting any wrongdoing.

Court pleadings examined by KHN identified more than 700 surgeons who have taken money, including dozens who pocketed millions in royalties, fees or other compensation from 2013 through 2019.

The names of hundreds more surgeons were redacted in court filings or sealed by judges.

Court filings named 35 spine surgeons who used SpineFrontier’s surgical gear, some for years. At least six of those surgeons have admitted wrongdoing and paid a total of $3.3 million in penalties. Another has pleaded guilty to criminal charges. It’s illegal under federal law to accept anything of value from a device maker for using its wares, though most offenders don’t face criminal prosecution.

Chin, 57, who lives in Fort Lauderdale, Florida, and owns SpineFrontier through his investment company, declined comment about the DOJ lawsuit or the consulting agreements.

 

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