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Can a neurosurgeon have ties to a medical device company?

The United States Department of Justice (DOJ) recently announced a settlement between the feds and a neurosurgeon. The neurosurgeon owned two medical device distributorships and was accused of the following:

  • The feds state the accused used illegal kickbacks to incentivize medical professionals to use his devices. These kickbacks included lavish meals and alcohol at a restaurant owned by the neurosurgeon’s wife.
  • Profit from sales. The government also claims the neurosurgeon also profited from using the medical devices during medical procedures he completed on his own patients.
  • False claims. According to the feds, the neurosurgeon also filed claims for medically unnecessary procedures.

As part of the settlement, the neurosurgeon and the businesses are excluded from participation in federal healthcare programs for the next six years.

The case is yet another example of the feds crackdown on allegations of violations of the Anti-Kickback Statute (AKS). But it also raises an important question: can doctors have connections to medical device companies? Afterall, physicians likely have the experience and knowledge needed to design, adjust, and implement a more beneficial device for patients, don’t they?

The answer is a complex one. The government wants physicians to make medical treatment decisions based on patient health, not financial gain. As a result, having an interest in a medical device company can run afoul of many federal and state laws and regulations. Those who are considering this type of arrangement are wise to tread carefully. Review the proposed arrangement and address any potential risks before moving forward with the arrangement. If already in an arrangement, consider an audit to check for compliance.