Surgical device maker faces kickback investigation

I have ongoing in Little Rock, Arkansas a case against former neurosurgeon Patrick Chan, M.D. (now convicted felon) and spine products company known as BLACKSTONE MEDICAL, INC. Our lawsuit alleges that the neurosurgeon performed unnecessary surgery as part of an illegal kickback scheme under sham consulting agreements with the spine products company, i.e., a civil conspiracy with underlying medical malpractice (violation of informed consent -- doctor lied about results of MRIs to induce patient to consent to surgery). There is presently also pending a qui tam lawsuit in USDC, Eastern District of Arkansas, Western Division captioned USA ex rel. John Thomas v. Patrick D.S. Chan, Blackstone Medical, et al., which similarly bears allegations that Dr. Chan and Blackstone Medical engaged in a scheme to defraud Medicare and Medicaid. Dr. Chan has settled in the qui tam (although not yet in our separate state suit) for 1.5 Million. The qui tam remains pending against others, including primarily Blackstone Medical. I have learned in our litigation that Dr. Chan was awarded 120,000 shares of stock in the company, along with cash fees, reimbursements, gifts, honoraria, study grants and royalties. In emails produced in discovery, Dr. Chan professes his loyalty to the company and his desire that the company go "higher and higher" because "what benefits Blackstone, benefits me." This may be the reason that Dr. Chan could report a net worth of approximately $10 Million at the time of his arrest on September 13, 2006 by federal authorities, and to subsequently post a $4 Million cash bond plus real property holdings to secure his release pending trial.

Dr. Chan pled guilty in federal court on January 3, 2008 to accepting and receiving approximately $7000 to $8000 per month in kickbacks representing one-half of the commissions earned by an Orthofix sales representative on her sale of spine products used by Dr. Chan in his surgeries. Concurrently with such activity, it is alleged that Dr. Chan had spurious consulting agreements in effect with Blackstone Medical (2002 - 2006, inclusively). On August 4, 2006, Orthofix acquired Blackstone for a reported $333 Million, with $50 Million reportedly placed in escrow to cover anticipated claims which is believed to indicate the company's awareness of Blackstone's exposure relative to its physician consulting arrangements.

BLACKSTONE MEDICAL is itself currently under investigation by the federal OIG, which deals with Medicare / Medicaid fraud cases. ORTHOFIX reports that Blackstone received a subpoena on July 23, 2007. Reportedly, a subpoena has also been issued by the USAG's office in Nevada. It is widely believed that the investigation will expand, given the scope of Blackstone's operations as a national / international company, having relationships with spine surgeons around the United States. Blackstone continues to deny all allegations of wrongdoing.

I post this because my highest duty as an attorney is to protect the public, and advance the interests of justice for those who may have been victims of such illicit arrangements yet who may be wholly unaware of underlying conflicts in the relationship between their doctors and products companies, particularly in the often life-altering context of spine surgery. The better informed we are, the better armed.

Brandon L. Clark
Attorney at Law
P.O. Box 45668
Little Rock, Arkansas 72214
501-590-2581 (cell)
501-537-1000 (office / local)
866-537-1010 (office / toll free)
501-537-1001 (fax)
www.brandonlclark.com

Still advertising there brandon? Tired of chasing ambulances? Are you copying and pasting yourself or is that a secretary doing it for you?

This is just the tip of the iceberg as far as spine surgery is concerned. Well qualified and experienced neurosurgeons have told me 98% of the spine fusion surgeries performed by ortho-spine surgeons are unnecesary. We typically bill over $100K per procedure for these surgeries. All of the ortho-spine surgeons are "in bed" with one or more spine implant companies. In one case, the surgeon owns the implant company outright. If the federal government wants to decrease medical costs in this country, this might be a good place to start. I've been in the medical field for a long time and have lost all respect for the doctors I see coming out of med schools nowadays. All they seem to care about is making money. Patients are nothing more to them than dollar signs.

Kudos to your posting..18 surgeries here for me and the docotor added extra parts not included with the medtronic kit for my implant. .Another medtronic lead does the same thing and the fda was not even aware I had it in me when I contacted them, which they were suppose to be.I was lied to about being in a clinical trial ,,my implant was 2001 and they did not even start testing the device in a clinical trial for my purpose till 2004...as listed by the fda. the doctor in my case is a head neurosurgeon in the twin cities and I'm having a hard time finding an atty,,,so all you people thinking about medtronic implants unless you're dying I would not get one from medtronic cause you'll probably die anyhow IMPO. thank goodness mine wasn't for my heart or I would be gone by now.