UPDATE: Dec. 8 2010, 9:15 A.M.
Emails from executives at Abbott Laboratories (NYSE:ABT) show company leaders’ approved and encouraged the high number of stent procedures that eventually precipitated a federal fraud lawsuit.
The emails, subpoenaed by the Senate Finance Committee, contained statements from Abbott executive vice president John Capek touting St. Joseph Medical Center cardiologist, Dr. Mark Midei for implanting 30 stents in one day at the Townson, Md. hospitals. Capek later emailed Dr. Midei thanking him for his support of the company and for “perhaps settiing [sic] the single-day implant record.”
The report containing the emails, which was released this week, revealed that Midei was the recipient of research funding and gifts from the company. The doctor was dismissed by his hospital for alleged fraud and sued by 101 patients in which he implanted coronary stents manufactured by Abbott.
Abbott provided the perks to Midei, such as VIP travel and lavish dinners at his home, at about the same time that the number of his stent implantations soared, according to the report.
The Senate committee began investigating Midei and St. Joseph in February for healthcare fraud news broke that Midei inserted stents into patients that may not have needed them. Midei installed the cardiac devices into more patients than almost any other doctor in Baltimore, according to the report. A month prior, his hospital had notified 369 patients that the stent procedures they underwent may have been inappropriate.
The committee’s 170-page document calls the case “a clear example of potential fraud, waste and abuse,” and states that the Towson, Md.-based medical center billed private and government insurers more than $6.6 million for the stent procedures, with Medicare charges comprising $3.8 million of the fraudulent charges. The committee said their investigation raises concerns about “whether or not Abbott Laboratories indirectly encouraged Dr. Midei to intensify his use of stents, with unfortunate results,” according to the Baltimore Sun.
The hospital and Midei were slapped with a class-action lawsuit two weeks after the hospital notified patients about the possibly unneeded procedures in January. A Towson attorney later filed 101 complaints against the two alleging conspiracy, negligence and fraud.
In November, St. Joseph agreed to pay $22 million to the federal government to settle a whistleblower lawsuit over the implantations, without admitting any guilt.
The lawsuit, which was under seal until Nov. 9, was filed by a trio of cardiac surgeons who alleged that the hospital and an independent practice, MidAtlantic Cardiovascular Associates, ran a 10-year scheme to drive referrals from St. Joseph to MACVA.
Drs. Stephen Lincoln, Peter Horneffer and Garth McDonald, who filed the suit the government later joined, stand to split nearly $2.8 million, their share of the settlement from their “qui tam” whistleblower lawsuit.
New laws included in President Barack Obama’s healthcare reform proposal would have made the benefits Midei received from Abbott public. The Physician Payments Sunshine Act requires pharmaceutical and medical device companies to disclose to the government payments to physicians. The information will go public on Sept. 30, 2013 in a web-accessible database.
Last spring, Vermont issued data that showed a 13 percent decrease in total payments to physicians in fiscal 2009, according to Kaiser Health News. The reporting requirement began in 2002.
Vermont has some of the nation’s most stringent rules on the marketing of medical devices and drugs. In June 2009, the state signed into law the nation’s most restrictive gift ban. The state’s rules imposed even more stringent rules than the famously strict regulations then newly enacted in Massachusetts. Both states restrict nearly all gifts to physicians, including meals. But unlike the Bay State, which requires public disclosure of all payments and gifts worth more than $50, Vermont’s rules call for full transparency for all gifts and payments to doctors by device makers and drug companies and bars free meals altogether.
In November, Massachusetts itself released the first round of data on healthcare industry payments to physicians from filings by medical device, pharmaceutical, biotech and other healthcare companies mandated by the state’s gift ban law.