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AAOS Now

Published 9/1/2009
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Jennie McKee

Transparency: the ‘silver bullet’ in compliance

Disclosure must play a key role in physician-industry relationships

“The world has changed,” Kathleen McDermott, JD, told an audience of American Orthopaedic Society for Sports Medicine (AOSSM) fellows during the 2009 AOSSM Annual Meeting. “Expectations of transparency, evolving ethical standards, and competition for physician and hospital business have created a challenging climate to navigate.”

Ms. McDermott, a former federal prosecutor who has been involved in healthcare compliance and enforcement matters since the early 1990s, joined Brian J. Cole, MD, MBA, in addressing the legal and ethical issues that affect orthopaedists industry relationships.

The shifting regulatory and enforcement landscape
In recent years, both the Department of Justice (DOJ) and the media have conducted investigations into the relationships between orthopaedic surgeons and industry. The allegations of misconduct threatened to erode the public’s trust in the orthopaedic profession and raised questions and concerns among orthopaedists about how to collaborate with industry in an ethical manner.

“It’s almost impossible to be in the healthcare industry and not receive some scrutiny or be aware of concerns regarding the relationship between product sales and physician collaboration,” said Ms. McDermott. At the core of these concerns are financial conflicts of interest and whether financial interests may influence medical decision-making when it comes to patient treatment or products purchased in hospitals.

This probing will continue for some time, she said, because “some are inherently suspicious of collaboration, which doesn’t make a lot of sense when you consider the importance of innovation.”

The government expects all compensation to be at “fair market value” and to be commercially reasonable, not taking into account the volume or value of referrals, noted Ms. McDermott.

“Different standards make the concept of ‘fair market value’ a hornet’s nest,” she said. “If you collaborate with industry and you have not documented fair market value—that may become hugely problematic down the road.” This is an area for expert, rather than “do-it-yourself,” efforts.

Potential conflicts of interest are ubiquitous, said Dr. Cole, especially when investigators are involved in product development and in performing clinical trials.

He explained that a broad definition of a conflict of interest “involves circumstances that create a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest.”

Dr. Cole noted that the primary interest may include promoting and protecting the integrity of research, welfare of patients, and/or quality of medical education.

“Secondary interests may include financial gain, professional advancement, recognition for personal achievement, and favors to friends, family, students, and colleagues. These interests are where the ugliness comes from,” he continued.

Potential conflicts of interest have played an integral role in recent investigations centered on the antikickback statute, which makes it illegal for a physician to accept payments from a manufacturer to recommend an item or service. The federal False Claims Act makes it illegal to knowingly submit a false or fraudulent claim or statement to Medicare or Medicaid. Penalties for violations include steep fines; under the Civil Monetary Penalties Act, violators can also be fined and prohibited from participating in any government programs.

Transparency is the key
The best way to avoid compliance concerns, said Ms. McDermott, is to be totally transparent in dealing with patients, institutions, and peers regarding industry collaborations.

“I know some doctors do not like to make disclosures and sometimes the institutional process for doing so is difficult,” she acknowledged, “but transparency is the ‘silver bullet’ in compliance.”

She recommended complying with the AAOS Standards of Professionalism on Orthopaedist-Industry Conflicts of Interest as well as with hospital policies on conflicts of interest.

“Hospitals are getting substantially more involved in conflict of interest management,” she noted.

Dr. Cole also advised the audience to document all processes objectively. Both healthcare professionals and industry representatives must be accountable for maintaining ethical and legal standards, with disclosures and complete transparency.

“Verify that companies you work with establish an annual needs assessment in a timely manner,” he continued. “Device makers should perform this task prospectively, rather than doing it on the fly.”

He also noted that it’s critical for physicians to maintain a separation between themselves and industry field personnel when it comes to product ideas.

“Ideas about product development should go directly up the ladder and should skip over those with whom orthopaedists interface in the field,” he said.

Another important concept, he said, is including a clause in any agreement with industry that states that no royalties will be paid to the physician or the institution for a device developed by the physician when the device is used at that institution. Historically, this stipulation about royalties was omitted, he said, so physicians must be vigilant.

Establishing hospital and/or practice compliance programs can be very helpful, as can remembering that anything that sounds too good to be true, probably is.

For additional information about compliance, see the online version of this story, available at www.aaosnow.org

What does the future hold?
If the proposed Physician Payments Sunshine Act (S2029) becomes law, manufacturers of pharmaceutical drugs, medical devices, and biologics would be required to disclose any payments (including—but not limited to—gifts, honoraria, travel, and grants) to physicians totaling more than $100 annually. Physicians would have to report any ownership interests in private companies. Penalties for failure to report would be steep—up to $1 million.

“We have to ask ourselves, ‘How far will this go?’” said Dr. Cole, who recommends avoiding “exaggerated responses that imply it’s fundamentally wrong for orthopaedists to have relationships with industry.” He advised educating the public and others about important innovations that have resulted from orthopaedist-industry collaborations.

“Millions of patients have benefited from surgeon-industry collaboration,” he said. “Just look at the interference screw designed by Masahiro Kurosaka, MD, and the suture anchors and arthroscopy equipment designed by a number of investigators.”

Dr. Cole noted that unlike the pharmaceutical industry, where innovation is often initiated by scientists in the laboratory, developments in orthopaedics often begin in the operating room when surgeons identify limitations in existing technology.

“We must not compromise innovation by squelching physician-industry partnerships,” he urged. “After all, what would we do without advances in technology?”

Jennie McKee is a staff writer for AAOS Now. She can be reached at mckee@aaos.org

Online Extras:

AAOS Standards of Professionalism

AAOS Opinion on Ethics and Professionalism