Dangerous Atherectomy Boom? Docs Pay to Avoid Punishment; Fake Part Inflated Prices

Welcome to the latest edition of Investigative Roundup, highlighting some of the best investigative reporting on healthcare each week.

Dangerous Atherectomy Boom?

An attempt to save money on vascular patients backfired when a change to medicare payment structure added incentives for physicians to perform risky outpatient procedures, according to a ProPublica investigation.

In 2008, CMS "turbocharged" office-based payments for stent and balloon procedures -- from about $1,700 and $3,800, respectively, to $6,400 and $4,800. Just a few years later, CMS also fully reimbursed providers for atherectomies -- at a payout of about $13,500 per procedure, compared with about $11,450 in a hospital.

Rather than save money, the change resulted in a 60% increase in atherectomies from 2011 to 2014, ProPublica reported.

"[Atherectomies are] definitely being used inappropriately, and that's when bad things happen," Caitlin Hicks, MD, associate professor of surgery at Johns Hopkins University School of Medicine in Baltimore, told ProPublica.

ProPublica reported on the example of Jeffery Dormu, MD, a vascular surgeon based in Maryland who has performed more than 3,400 atherectomies over the last decade and earned tens of millions from Medicare reimbursements. Many of Dormu's former patients have filed malpractice suits against him, ProPublica reported.

After reviewing the records of 11 of Dormu's patients, the Maryland Board of Physicians found he performed "medically unnecessary and invasive vascular procedures," according to the report. Last fall, the Board fined him $10,000, suspended him, and put him on a 2-year probation.

Doctors Pay to Avoid Criminal Punishment

On at least two occasions, New York surgeon Feng Qin, MD, avoided criminal punishment by paying hefty fines -- and he's far from alone, according to an investigation by Reuters.

Qin performed medically unnecessary cardiac procedures on his client base of mostly elderly immigrant New Yorkers, according to the report. After paying a $150,000 fine decided in a civil suit, he was free to continue practicing medicine. Within months of that settlement, a nurse-turned-whistleblower who worked at Qin's practice alerted federal prosecutors that Qin was at it again.

Qin was indicted in 2018 on a felony count of fraud, but 3 years later, "in a deal brokered behind closed doors, prosecutors dropped that charge in favor of yet another civil settlement," according to court records reported by Reuters. Qin agreed to pay $800,000 but kept his license.

Qin is part of a larger trend of providers and hospital systems who "pay-to-stay." In an analysis of 540 cases, Reuters found doctors and healthcare professionals paid the government "hundreds of millions of dollars to negotiate their way out of trouble via civil settlements, then continued to practice medicine without restrictions on their licenses despite allegations that included fraud and patient harm."

In addition, more than 2,200 hospitals and healthcare companies negotiated similar deals to prevent prosecution.

Ultimately, the U.S. government has collected more than $26.8 billion in healthcare-related civil settlements and judgments from 2013 to 2022, Reuters found.

Fake Device Part Inflated Prices

Nearly 8,000 chronic pain patients had a Stimwave device implanted that contained a plastic piece that did nothing but inflate prices, a STAT investigation revealed. The phony plastic piece added thousands of dollars to the device cost, and defrauded Medicare out of millions, prosecutors allege.

Stimwave began as a startup treating chronic pain with a nerve-stimulating device that stood out from clunky competitors by being sleek. The device underwent a handful of design changes, which included adding a plastic part that made it cost more and let doctors bill insurers for thousands more, according to the report.

A Stimwave sales associate-turned-whistleblower contacted federal investigators in 2018 about shady business practices and sales tactics touted by the company and then-CEO Laura Perryman, such as allegedly lying to doctors that the plastic piece was necessary.

The plastic piece was never reviewed by the FDA, according to the report, and Stimwave encouraged doctors to put the same code for it as an already approved copper one. A lot of doctors didn't realize the plastic piece was medically unnecessary -- and neither did patients.

"Any material, the body tries to reject it," Victor Krauthamer, former director of the division of biomedical physics at the FDA, told STAT. "I would not want anything implanted unless it had a real use."

Perryman was ousted and under new management, Stimwave rebranded as Curonix but still declared bankruptcy last year.

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