Surgical device maker faces kickback investigation

Things are getting ugly for device maker Blackstone Medical, which is facing a federal investigation for allegedly paying kickbacks to doctors who use its equipment. The federal government has asked Blackstone, which makes and sells devices used in spinal surgery, for documents from 1999 regarding possible payments or gifts provided to physicians. The government is now investigating whether the scheme led to participating hospitals filing false claims under Medicare and Medicaid.

Blackstone, of Springfield, MA, has already gotten one black eye in the case. An Arkansas neurosurgeon has pleaded guilty to soliciting and accepting kickbacks from a salesman for Orthofix International, Blackstone's parent company. Dr. Patrick Chan agreed to pay $1.5 million to settle the charges, which resulted from a whistle-blower suit filed on behalf of the government. Among other things, Chan was accused of receiving stock options in Blackstone for using its equipment, and also, for doing unnecessary surgery just to use a Blackstone device.

To find out more about the case:
- read this piece from The Boston Globe

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