Guidant kickback case: Army cardiologist fined $12,700

Boston Scientific

A U.S. District Court hit military cardiologist Major Jason Davis with $12,700 in fines to repay gifts and payments he received from Boston Scientific Corp. (NYSE:BSX) Guidant Corp.

The judge ordered Davis to repay “every dinner, every bottle of wine and every other gratuity that you have ever received from Guidant” in announcing the sentence against him.

The same relationship cost Guidant $600,000 last year to settle claims that it provided illegal payments to Davis "so that he would use the company’s medical devices in cardiac procedures he performed and use his influence with other physicians practicing at Madigan Army Hospital so they would use the company’s devices as well," according to a U.S. Dept. of Justice press release.

“We resolved the matter in November 2010 for an amount not material to us," BSX’s February 2011 annual report reads.

Between April and October 2007 Davis accepted nearly $5,000 from Guidant. Other payments included a $2,000 speaking fee and nearly $5,400 in meals and other items from 2005 to 2007.

Davis began working at Madigan Army Medical Center in 2004 and became chief of cardiology in 2008. Between January 2006 and February 2009, Boston Scientific provided him with meals, payments and other gratuities, and he almost exclusively used Boston Scientific pacemakers and implantable defibrillators.

"There is no question but that Dr. Davis committed a criminal offense, and that he should have known better, but there is also no doubt that those who plied him with food, alcohol, money and other courtesies knew exactly what they were doing, and why they were doing it," prosecutors wrote in their sentencing memo.

Although such exchanges are common in the private sector, government personnel are strictly forbidden from accepting gifts or payments from above $20.

At least 15 device companies have paid $6.5 billion to settle accusations of marketing fraud or illegal kickbacks since 2008, but no doctors have faced consequences, according to a joint investigation by ProPublica and the Washington Post.

"In many of the cases, it appears that not even a cursory investigation was done to see whether the physicians had behaved inappropriately," according to the investigation.

Boston Scientific is still struggling with the Guidant deal, commonly referred to as one of the most misguided in history. Late last month the company agreed to pay $9.25 million to settle allegations that the med-tech goliath’s Guidant subsidiary overcharged federal health care programs for medical devices.

In 2009, a Dept. of Justice probe led to a $22 million fine for allegations of illegal kickbacks for illegal kickbacks paid to docs for participation in post-market surveys in 2003 and 2004 in a bid to boost pacemaker and defibrillator sales.

In sentencing Davis, presiding Magistrate Judge Creatura found that "no patient’s health was compromised," and he is scheduled to be deployed to Afghanistan.

"Our military needs all medical resources it can get in a time of war, and it is the desire of this court that you continue to serve our country," Creatura said. 

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