Star-Ledger: DOJ Settlement Could Come this Summer
BY LAUREN UZDIENSKI, MAY 24, 2007
A DOJ investigation into surgeon compensation practices by Biomet, Depuy, Smith & Nephew, Stryker and Zimmer in 2005 could reach a settlement "as soon as this summer," according to the Star-Ledger's John P. Martin. Current terms of the settlement are anticipated to be hundreds of millions of dollars in damages, an industry-wide pledge for reform and the installation of a federal monitor, a deal that Depuy is said to be resisting despite cooperation from the other companies named.
The N.J.-based investigation has turned up information on consulting arrangements where surgeons were paid up to $200,000 a year for little or no work, as well as sought surgeon loyalty with lavish dinners and trips. Martin notes that some companies are rumored to be more "egregious" in their efforts than others, though details are not known. The DOJ has not even publicly confirmed or denied the investigation, whose scope includes activity from 1998 to 2004.
Despite the sweeping terms outlined in the proposed settlement, there is evidence over the past two years that orthopedic firms are stepping up and self-policing. With the DOJ investigation looming, many of the companies involved have already made efforts to reform their operations. Many of the companies replaced their top management since the subpoenas, and industry acceptance of the Advamed Code of Ethics indicates change in industry-surgeon relationships. Though steep fines could, as Martin writes, "rattle the industry, [they] would not derail it," sentiment that has been echoed across the industry and among analysts, affirming the overall health of the sector regardless of the investigation's outcome.
