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Question
Kyphon employees sold, sold, sold Kyphon's products for spinal fracture repairs. One rep took his territory's sales from $16,000 a month to $200,000 per month in less than a year. Incentive programs do produce miracles.Kyphon, now Medtronics Spine, faced Medicare fraud allegations when two former employees brought suit under the False Claims Act. Medtronics acquired Kyphon in 2007 while the former employee suits for Medicare fraud were pending. According to documents in the case, Kyphon sales reps didn"t just tout the benefits of Kyphon products, and indeed there are many. The sales reps offered the doctors and hospitals a way to keep patients overnight. Helping docs and hospitals bill Medicare for an overnight stay on what was only a one-hour, walk-away outpatient procedure was a boon. Kyphon created a mutually beneficial triangle: more sales for Kyphon, more commissions and bonuses for reps, and more revenue for docs and hospitals.
Discuss the ethical issues in this scenario. Was it a violation of the law in terms of Medicare reimbursement?
Answer
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