Medical Device Distributor Allegedly Violates Anti-Kickback Statutes


Medical Device Sales Expert WItnessThis anti fraud case involves a medical device distributor and a hospital in New Mexico which allegedly violated Medicare anti-kickback statutes, as well as industry ethical standards. The distributor in question employeed a woman working at a medical center that the medical device firm sold to, and gave her a commission for every device sold to the medical center. Allegedly, this employee was also involved in a romantic relationship with one of the hospital’s general surgeons, who frequently purchased equipment from the defendant firm. Representatives from other medical device firms made note of this conduct and reported the issue. It was alleged that the payments received by the hospital’s employee were unethical.

Question(s) For Expert Witness

  • 1. Please briefly describe your work with the AdvaMed Code of Ethics and your work with anti-kickback statutes in the healthcare industry.

Expert Witness Response E-056921

Expert-ID: E-056921

It appears that this rep crossed the line and his/her misconduct influenced the judgement of the surgeon, which is a clear violation of the AdvaMed code. The act of hiring an employee of the hospital and paying commissions for sales he/she makes appears to be in violation of anti-kickback regulations. I have worked for two medical device companies that were founding members of AdvaMed and have completed annual training on AdvaMed and Medicare anti-kickback for the past 10 years. I understand the do’s and don’t with regards to these codes and laws.

Expert Witness Response E-076881

I have more than 30 years of experience in the medical device industry from field sales of surgical implantables to positions of greater and greater responsibility in surgical companies and diagnostic companies. Since AdvaMed started instituting “codes” in the early 2000’s I have worked for companies that complied with them. I have also been very aware of anti-kickback statutes throughout my career; no company that I worked for was ever accused of Code of Ethics or kickback violations. If the employee was acting as an employee of the hospital when assisting the surgeon during surgery, and he would eventually receive a commission for the product used in that surgery, he is surely in violation of anti-kickback laws. Therefore the entity that paid him to influence the use of the product (the distributor) would be in violation as well. Depending on the contract the distributor has with the manufacturer, the manufacturer may have some liability. The distributor would also be in violation of the AdvaMed Code in that they financially rewarded a health care professional and employee of a medical institution to influence the use of a product.

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