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OIG challenges company's sales practices

Device Regulation Alert: Safety, Compliance and Reimbursement News, July 23, 2007

In last week's issue, we began our series on training medical device representatives about compliance issues such as kickbacks. A recent OIG announcement demonstrates the dangers of not focusing enough of your compliance efforts on training and monitoring your company's sales and marketing efforts.

In a July 2 release, the OIG announced a $2.95 million settlement with a medical device manufacturer, Advanced Neuromodulation Systems, Inc. (ANS). The OIG charged that the company's sales and marketing staff provided "sports tickets, free trips, free dinners, grants, and other gifts" to physicians. The OIG also alleged the company paid money to physicians for "every five new patients tested" with a company product.

In addition to the monetary settlement, the company also entered into a three-year corporate integrity agreement. That agreement will include reviews of the company's arrangements with physicians and requires that the company implement specific compliance efforts.

The OIG notes that ANS cooperated with the investigation and that during the investigation the company was purchased by St. Jude Medical, Inc. The corporate integrity agreement notes that it applies only to U.S. operations of ANS that are subject to federal healthcare program requirements.

To read the release and the corporate integrity agreement click here.

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