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Senate hears testimony on relationships between device industry and physicians

Device Regulation Alert: Safety, Compliance and Reimbursement News, March 17, 2008

OIG Assistant Inspector General for Legal Affairs Gregory E. Demske detailed the risks associated with financial relationships between physicians and the medical device industry in testimony before the Senate Special Committee on Aging on February 27.

"Financial relationships between the medical device industry and physicians are pervasive and can create both benefits and risks to patients and healthcare programs," Demske said.

He highlighted recent enforcement actions that illustrate how industry payments and benefits provided to physicians can influence their choice of devices. Payments to physicians are often kickbacks, according to Demske. He also criticized the growing trend of physicians owning medical device manufacturers.

Demske said the OIG's enforcement tools include:

• False Claims Act
• Anti-kickback statute
• Administrative sanctions such as Medicare exclusion and the Civil Monetary Penalties Law

The OIG provides guidance to help avoid violations in:

• Advisory opinions
• Fraud alerts
• Bulletins
• Compliance program guidance

The Compliance Program Guidance for Pharmaceutical Manufacturers can help device manufacturers comply with federal law and prevent improper relationships with physicians. Demske also emphasized the need to disclose relationships between physicians and medical device companies.

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