Thursday, July 16, 2009

The Art of Whistleblowing

"Truth is the most powerful force on earth"

The dictionary defines "Whistleblower" as a person who informs on another, or makes public disclosure of corruption or wrongdoing. Synonyms for the word are foulness, contamination, and pollution. In today's blog, the Spine Blogger discusses the motivation and intent as to why any industry professional would bring legal action against a company, by claiming that an organization would employ fraudulent schemes to increase revenue and market share. These schemes would include; sham consulting agreements (never in our industry), illusory training, bogus research, bogus speaking fees, lavish entertainment lodging expenses, expensive meals and wines, gifts and discounts.

In order to comprehend the magnitude and severity of potential accusations, industry professionals need to understand and abide or be prosecuted for violating the Anti-Kickback Act, 42 U.S.C. Section 1320(a)-7b(b). It states; "IT IS UNLAWFUL TO KNOWINGLY OFFER OR PAY ANY REMUNERATION IN CASH OR IN KIND for referral of any product for which payment is sought from any federal funded healthcare program such as Medicare, Medicaid or Tricare.

So why do we work in an industry where there have been multiple whistleblowing lawsuits brought against various companies? Could it be that there is a lack of ethics, integrity and rationality? In all likelihood many of our readers probably believe that a "whistleblowers" only motivation for retaliation is to make money or that they are a disgruntled employee. If we understand the process in filing a lawsuit, there has to be a chain of evidence, or a claim, that can be substantiated legally. Any attorney that files a frivolous claim on behalf of a whistleblower can be sanctioned by the court. That is why we don't see half as many whistleblower cases as has been reported by another orthopaedic platform. In addition, if the government becomes involved in a "qui tam" lawsuit the process could take years due to investigating the alleged offenses, with a 15-25% payback to the relator. So why the lawsuits, and what are the ramifications for the whistleblower?

The behavior that companies and their executives have exhibited in our industry has been the main catalyst behind these suits. The gross margins are phenomenal (Wall Street can you sink your teeth even further into our industry and make our CEO's insane), the egos are Everest like, and independent distributors and direct sales people have the ability to make more money than many middle or upper managers. In 2006 alone the industry was fined roughly $350 million plus dollars by the federal government. Medtronic was fined $40 million related to kickbacks paid to surgeons in exchange for their business (The Poteet Suit), Zimmer, Biomet and Smith and Nephew agreed to pay $311 million dollars executed under a deferred prosecution payment with the US Attorney's office for the District of New Jersey for violations of the Anti-Kickback statute and the civil Federal False Claims Act. Stryker was spared any monetary punishment because the word on the street was that one of its former CEO's assisted and cooperated with the US Attorney (Christie) to minimize collateral damage. (I don't hear any CEO's crying foul) In 2008, Medtronic paid a $75 million dollar fine to the federal government to settle a whistleblower lawsuit that exposed the company's sales and pricing strategy to defraud Medicare for fraudulent indiscretions by Kyphon. In 2008, Patrick Chan a neurosurgeon pleaded guilty in an Arkansas court to taking kickbacks from medical device suppliers and paid $1.5 million dollars to the government and a whistleblower. This resulted in an ongoing investigation into Blackstone and other medical device companies. It is interesting to note how Orthofix has cleaned house and distance itself from the Blackstone reputation. If the DOJ is truly committed to vigorously investigating, prosecuting, and punishing those healthcare companies and providers who seek to manipulate the system for their own financial game, its time to step up to the plate.

But what about the Whistleblower? Unfortunately, the immediate response is to distance oneself from the individual. But why? Is it because we personally don't have the strength and courage to stand up to an industry that has spun out of control? If it hasn't, why is the DOJ and Big Brother keeping a watchful eye on the industry witnessed by the Kuklo and Blackstone investigations? Are we so driven by money that we put blinders on and frown upon a whistleblower's accusation until it effects us personally? If the argument is that we police ourselves, then our industry is nothing more than a three ring circus. Look at AdvaMed. Look at the lack of power NASS exhibits. Just look at who dictates policy for our trade shows (the Spine Cartel) and you can understand why there is a need for people to stand up and be heard. In all likelihood being the Whistleblower is a lonely journey, yet, one that should be respected. Potentially blackballed and threatened these people should be applauded for their strength and courage. The Spine Blogger wants to know what you think?


  1. Nobody likes a snitch. Let he who is without sin among you cast the first stone...

  2. SpineDoc1: That's what makes our country so great, everyone is entitled to an opinion. Keep on Bloggin! Thank YOu!

  3. The only people who don't like a snitch are the ones being exposed. Since you mentioned scripture maybe you should check out Proverbs 10:17 Whoever heeds instruction is on the path to life, but he who rejects reproof leads others astray.