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Is Medtronic Paying Doctors to Use Spine Devices?

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A Wall Street Journal report is raising serious questions about the proliferation of spinal fusion surgery and Medtronic Inc.’s payments to doctors who perform such surgeries. According to the report, Medtronic is the biggest maker of spinal implants, and its spine business generated world-wide sales of $3.5 billion. That amounts to half the market for the products.

According to The Wall Street Journal, one spinal fusion surgery can involve tens of thousands of dollars worth of hardware. The procedure, which involves using metal plates, rods and screws to fuse together two or more vertebrae to alleviate back pain, is a relatively controversial procedure, according to the Journal. Some surgeons argue that a spinal fusion is appropriate only for a small number of conditions, such as spinal instability, spinal fracture or a severe curvature of the spine known as scoliosis.

The Journal report highlighted one group of Kentucky spine surgeons who have received $7 million from Medtronic in just the first nine months of this year. These five surgeons from Norton Hospital in Louisville ranked third in the number of spinal fusion surgeries on Medicare patients between 2004 and 2008.
The most controversial use of use of spinal fusion surgery centers on patients who merely suffer from aging disks, a condition known as degenerative disk disease.

One health insurer, Blue Cross and Blue Shield of North Carolina, announced that it would not cover spinal fusions for patients diagnosed with degenerative disk disease, because the procedure is considered “not medically necessary,” the Journal said. The Journal’s investigation found that one-quarter of spinal fusions performed at Norton Hospital between 2004 and 2008 were performed on people with degenerative disk disease. Nationally, the rate is around 17 percent.

Medicare paid Norton Hospital $48 million for the 2,475 spinal fusions it performed on Medicare patients during those five years, according to the Journal analysis. Neither Norton nor Medtronic would tell the Journal how much of that money went to pay for Medtronic devices, but through a hospital spokesman, the surgeons acknowledged using mostly Medtronic devices in their surgeries.
The payments are being presented as royalties the surgeons received for helping Medtronic design a spinal fusion product. Medtronic says it does not pay surgeons royalties on devices they use in their patients, thereby removing any financial incentive for them to do more surgeries than necessary, the Journal said.

The article points out that over the past several years, Medtronic has been involved in lawsuits that alleged consulting agreements with surgeons were actually kickbacks to induce them to use the company’s products. One such whistleblower lawsuit, filed in 2002 by a former counsel at Medtronic’s spine division, resulted in a $40 million settlement after the US Justice Department joined the suit. According to a copy of the suit obtained by the Journal, the five surgeons at Norton Hospital became Medtronic’s biggest spine client after they signed consulting and royalty deals with the company in early 2001

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