Spine surgeons and distributors move to dismiss Medtronic whistleblower lawsuit

Plaintiffs allege defendants filed and received payment for unwarranted Medicare claims.

Issue: September 2008

On August 15 attorneys representing more than 100 spine care physicians and distributors named in a whistleblower lawsuit filed a motion for dismissal of a complaint two ex-Medtronic Sofamor Danek employees, recently filed in U.S. District Court in Boston.

Many of those named have a relationship with Medtronic Sofamor Danek in Memphis.

According to a statement Medtronic officials gave to Orthopedics Today, other motions to dismiss were filed previously in this case.

Plaintiffs and qui tam relators Jacqueline Kay Poteet and Bobbie Vaden of Memphis accused more than 130 orthopedic spine surgeons, neurosurgeons, medical practices and distributors of taking kickbacks from Medtronic for using their products, promoting off-label use of FDA-approved medical devices and filing Medicare claims in violation of the False Claims act, among other charges.

“We really do view this as just another effort by Ms. Poteet and her lawyer to intimidate someone into giving them money that they do not deserve,” John W. Lundquist, of Fredrikson & Byron PA, in Minneapolis, told Orthopedics Today.

Medtronic implicated

Lundquist’s firm represents about 80 physicians named in the complaint. He, two colleagues, and two attorneys at Nutter McClennen & Fish LLP, Boston, filed the August 15 motion for dismissal.

Medtronic is not named directly in the lawsuit, but a Medtronic spokesperson provided Orthopedics Today with the following statement on August 11:

“We have learned that a number of physicians and distributors who have relationships with Medtronic Spinal and Biologics have been sued by Kay Poteet in a case alleging violations of federal law. Poteet has made many of the same allegations in a prior lawsuit against Medtronic. That lawsuit was dismissed by the court at the government’s request because it was a copycat version of another case. While Medtronic is not a party to the new lawsuit, we are aware that the allegations relate to us. We are also aware that there are motions filed in the court seeking dismissal of the case, which appear to set forth serious grounds for ending the lawsuit.”

Surgical judgment

After industry-wide concern over the case started to subside, orthopedist B. Sonny Bal, MD, a co-editor of Orthopedic Medical Legal Advisor for Orthopedics Today, predicted, “The suit is likely to go nowhere.”

But questions remained on many people’s minds concerning a surgeon’s legal exposure related to off-label use of FDA-approved products.

Bal, who is not connected with this lawsuit, said off-label uses of devices and drugs are common. They are an exceptional use of a product that takes into account a physician’s “surgical judgment,” an ability that cannot be regulated. “The reality is that surgical judgment is surgical judgment. It takes years to develop and is exercised in an environment of mutual trust between the customer and the doctor,” he said. (For more on physician judgment and the law, see Orthopedic Medical Legal Advisor .)

Weak case

Lundquist explained Poteet’s latest case is without merit because of it is contradicted by the facts and because of its close resemblence to a string of similar cases filed in the past 7 years, including one she filed in federal court in Tennessee, which dismissed in 2006.

“Depending on how you count it, it is the third or fourth copy of the original claim,” that Medtronic made inappropriate payments to physicians, he said.

According to Lundquist, other weaknesses and areas the plaintiffs will have difficulty substantiating include the following:

Complaints concerning the False Claims Act must cite specific claims filed. These are not specific nor is there any factual basis to support attempt to associate Lundquist’s clients with “sham” payments from Medtronic;
Plaintiffs cited off-label use of products as illegal, when it is, in fact, legal; and,
The claim against physician defendants under the Stark Law, which is not implicated in this case.

Lundquist also noted the U.S. Department of Justice (DOJ) chose not to intervene in the case, which he maintains reflects on its lack of merit. A summary statement issued with the dismissal filing contends Poteet brought claims against many of the same people she named in her earlier suit solely to try to avoid a dismissal as was the result in the Tennessee case.

Delicate relationships

Rob Donohue, co-partner in a San Antonio spine device distributorship, said many who work in the orthopedic spine industry were expecting something like this to eventually happen and he predicted more activity will soon take place related to the DOJ investigations into the relationships between orthopedic device manufacturers and surgeons.

“I think the companies are going to start educating people that they wouldn’t have thought of educating previously,” Donohue told Orthopedics Today. Such education might cover consulting agreements, intellectual property (IP), how relationships between device firms, consultants and distributors are normally managed, and why surgeons may need to attend extensive on-site training with some devices, he said.

Donohue believes unethical, unlawful actions in his business are the exception. Most doctors are more than worth any payments they receive for IP, services rendered and added value delivered, he noted.

Orthopedics Today contacted Andrew R. Carr, Jr., of Bateman Gibson, LLC, who represents Poteet, by phone and e-mail, but he did not respond.

For more information:

B. Sonny Bal, MD, MBA, is associate professor of hip and knee replacement, Department of Orthopedic Surgery, University of Missouri School of Medicine. He can be reached at Missouri Hip and Knee, 204 N Keene St., Suite 102, Columbia, MO 65201; 573-882-6762; e-mail: balb@health.missouri.edu.

Rob Donohue can be reached at Milestone Surgical, 10221 Desert Sands St., San Antonio, TX 78216; 210-314-2525; e-mail: rob@milestonesurgical.com. He has no direct financial interest in any products or companies mentioned in this article.

John W. Lundquist, JD, can be reached at Fredrikson & Byron, 200 South Sixth St., #4000, Minneapolis, MN 55402-1425; 612-492-7181; e-mail: Jlundquist@fredlaw.com.