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Government investigators predicted to investigate hospitals’ participation in Medicare fraud in devicemaker schemes

Sometimes the medical equipment used for procedures in hospitals may not be bought because it is the best equipment or most efficient equipment. Sometimes the equipment is purchased because of financial schemes set up between doctors and medical devicemakers, where doctors often receive kickbacks.

A special report states that hospitals are the next in line in ongoing government investigations and lawsuits regarding relations between medical devicemakers and doctors.

U.S. attorneys in various major cities have sent both civil and criminal subpoenas to multiple producers of cardiac and orthopedic devices. These investigations have focused on the devicemakers themselves and their kickbacks to doctors; however, legal experts predict that the government will soon trace the money downstream to the hospitals where those doctors work.

Among other issues, the investigations focus on fraudulently billing Medicare for the promotion and use of certain medical devices and whether the judgment of doctors buying or recommending medical-devices is influenced by gifts and other kickbacks from the devicemakers. Investigators will scrutinize hospitals to see if the financial schemes between doctors and devicemakers were transparent and if the hospital over-billed Medicare for using these often more expensive devices.

Previous investigations have uncovered that doctors, some of whom held prominent positions within hospitals, were paid more than $400,000 a year for a few days of consulting in exchange for agreeing to purchase medical products from devicemakers. Under these financial schemes, doctors have also received royalty checks from the sales that developed by their promotion of the medical devices.

Legal experts conclude that by investigating hospitals, the government will be ensuring that hospitals play a larger role in enforcing anti-kickback laws. Hospitals will be held accountable for knowing more information about the doctors they employ and the relationships those doctors have with medical devicemakers. By actively investigating its doctors’ motives in recommending certain medical equipment, hospitals could help enforce anti-kickback laws and prevent Medicare fraud.

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