Medtronic Begins Disclosing Payments to Physicians

Elyas Bakhtiari, June 1, 2010

Medical-device company Medtronic, Inc. has begun voluntarily posting annual physician payments exceeding $5,000 on its Web site, well ahead of the 2013 deadline for mandatory disclosure of such information that was included in the new healthcare reform law.

The disclosure includes information about the type of relationship—training and education, research and development, advisory services, or royalties—as well as the rough dollar amounts and a few details about the specifics of the collaboration.

In the first quarter alone, the company paid more than $15.7 million in fees to physicians, most of it to orthopedic surgeons for surgical inventions. Orthopedists received $14.2 million, and royalty payments accounted for $13.9 million of that. Vascular and cardiac specialists, heart-rhythm doctors, and neurosurgeons received about $500,000 each, according to a Wall Street Journal report.

Only 227 physicians or physician groups received $5,000 or more annually and met all the criteria for disclosure, and some received exceptionally large payments for the quarter. A Tennessee orthopedic surgeon received nearly $4 million and a Louisville, KY practice received $2.4 million in the quarter for spine surgery inventions.

Medtronic will not release aggregate dollar amounts with future updates to the disclosure database, because the "purpose of the site is not to provide that aggregate data, it's for patients to learn about the types of relationships their physicians have," says Steven Cragle, spokesman for Medtronic.

Although the healthcare reform law will require the rest of the medical device industry to disclose similar relationships with physicians in a few years, Medtronic has received special attention and criticism in recent years.

In 2008, Sens. Charles Grassley (R-IA), and Herb Kohl (D-WI) sent letters to Medtronic asking the company to provide details about its payments to physicians for consulting services after allegations surfaced that the company had paid kickbacks to surgeons to boost implant sales. Two years prior, Medtronic reached a $40 million settlement with the U.S. Department of Justice but denied any wrongdoing.

Kohl said of Medtronic's new disclosure policy that he appreciates "Medtronic's voluntary decision to stay ahead of the transparency curve."

In addition to disclosing payments to doctors, Medtronic has also revised its policies and procedures to make its relationships more transparent. Changes include limitations on royalty earnings and better documentation of fair market value and the business need for a service.

Elyas Bakhtiari Elyas Bakhtiari is a freelance editor for HealthLeaders Media.
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