The OIG Don’t Like That: Rockin’ The Casbah, Rockin’ the Casbah

June 4, 2024By Jeffrey N. Wasserstein

Today’s email brings an interesting, and somewhat confusing settlement of what should have been an ordinary antikickback statute case, and may bring about a clash between what many companies do and what the government may be objecting to.  Or, perhaps your loyal blogger is reading too much into a brief settlement document.

The facts of the settlement are rather simple.  DePuy Synthes, a subsidiary of J&J, was alleged to have given a Massachusetts spine surgeon named Tony Tannoury spinal implants and tools worth thousands of dollars in order to secure his business.  In 2023, DePuy paid $9.75 million to resolve these allegations.  (I remember when a $9.75 million settlement meant something.  These days, I barely read the papers if it’s less than a billion.  Also, stay off my lawn you durn kids.)  All of this is very routine and not terribly interesting.

Now, here’s where things get crazy kids.  Dr. Tannoury was alleged to have performed surgeries using these products in the Kingdom of Saudi Arabia, Lebanon, and Qatar.  However, there is not a single allegation in the settlement agreement that Dr. Tannoury was paid for these surgeries.  Now, the implication may be that he was, and it was this profit that induced him to favor DePuy products with his patients who were covered by Medicare and Medicaid in the United States.

But what if there’s more here?  Reading the settlement agreement, much like reading tea leaves, leaves me with the vague feeling that if the giving of the free devices and tools was sufficient to allege the kickback, and hence the allegation that Dr. Tannoury violated the False Claims Act, that the government could use the same theory for other, benign arrangements.  Walk with me a minute.

A thought exercise:  A company, at the behest of a key opinion leader, donates product to the doctor which the doctor takes overseas to treat sleeping sickness in Africa.  Or donates products to a surgeon to fix cleft palates in Ukraine.  In neither case is the donation to a charity per se, but it is being done for charitable purposes.  The KOL looks kindly on the company and uses its products, but that wasn’t the intent of the donation.  Is this problematic where the company intends to benefit the patients and not the physician?

Obviously, the easy way around this is to donate the equipment to a legitimate charitable organization, and companies should ensure that they do so, particularly in light of this settlement.  Because while one might assume that Dr. Tannoury was treating royals or other people in power, if in fact he was treating people in need, and not financially benefitting from these surgeries, does it really make sense to punish him?

Categories: Enforcement |  Health Care