" ! COMMITTEE PRINT

111TH CONGRESS

2nd Session

S. PRT.

111–57

STAFF REPORT ON CARDIAC STENT USAGE

AT ST. JOSEPH MEDICAL CENTER

PREPARED BY THE STAFF OF THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

MAX BAUCUS, Chairman

CHUCK GRASSLEY, Ranking Member

DECEMBER 2010

Printed for the use of the Committee on Finance

STAFF REPORT ON CARDIAC STENT USAGE AT ST. JOSEPH MEDICAL CENTER

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1

62–196

" ! COMMITTEE PRINT

111TH CONGRESS

2nd Session

S. PRT.

2010

111–57

STAFF REPORT ON CARDIAC STENT USAGE

AT ST. JOSEPH MEDICAL CENTER

PREPARED BY THE STAFF OF THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

MAX BAUCUS, Chairman

CHUCK GRASSLEY, Ranking Member

DECEMBER 2010

Printed for the use of the Committee on Finance
COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

BILL NELSON, Florida

ROBERT MENENDEZ, New Jersey

THOMAS R. CARPER, Delaware

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

MICHAEL B. ENZI, Wyoming

JOHN CORNYN, Texas

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)
C O N T E N T S

Page

I. Introduction .................................................................................................... 1

II. Background on Alleged Medically Unnecessary Stent Procedures ............ 2

III. The Cost of Dr. Midei’s Alleged Medically Unnecessary Cardiac Stent

Procedures .................................................................................................. 4

IV. Biased Peer Review Procedures at St. Joseph ............................................ 5

V. Dr. Midei’s Relationship with Abbott ........................................................... 6

VI. Abbott Reimbursements for Events at Dr. Midei’s Home .......................... 7

VII. Abbott and Dr. Midei after Allegations of Medically Unnecessary Procedures ............................................................................................................ 8

VIII. Cardiac Stent Usage in the U.S. .................................................................. 10

IX. Studies Analyzing Stent Usage .................................................................... 11

X. Medicare Spending for Medical Device Procedures .................................... 12

XI. Conclusion ...................................................................................................... 14

Appendix I—Medical Device and Cardiac Stent Payment Data from CMS ....... 17

Appendix II—Select Documents Cited in this Report .......................................... 23

(III)

(1)

1 ‘‘Stents are inserted into narrowed coronary arteries to help keep them open after balloon

angioplasty. The stent then allows the normal flow of blood and oxygen to the heart.’’ See definition at http://www.MedicineNet.com. A drug-eluting stent is ‘‘a normal metal stent that has

been coated with a pharmacologic agent (drug) that is known to interfere with the process of

restenosis.’’ Restenosis is when an artery closes after balloon angioplasty. See Drug Eluting

Stent Overview at Angioplasty.org, http://www.ptca.org/articles/des1.html. Similar cases include a Salisbury, MD cardiologist who was recently indicted by a grand jury and could face

up to 40 years in prison for allegedly performing more than 200 medically unnecessary stent

procedures and a Louisiana doctor who, in 2009, was sentenced to 10 years in prison for implanting medically unnecessary stents. See Tricia Bishop, Salisbury Cardiologist Indicted in

Stent Case, BALT. SUN, Sept. 2, 2010.

I. Introduction

The United States Senate Committee on Finance (Committee)

has a duty to conduct oversight of the Medicare and Medicaid programs. This duty includes the responsibility to monitor payments

made by the Centers for Medicare and Medicaid Services (CMS) for

medical devices, drugs, and biologics in order to protect taxpayer

dollars from waste, fraud, and abuse.

In February 2010, the Committee initiated an inquiry into reports that cardiologist Dr. Mark Midei (Midei) from the St. Joseph

Medical Center in Towson, MD (St. Joseph/the Hospital) may have

implanted 585 stents which were medically unnecessary.1

The Committee staff reviewed approximately 10,000 documents

provided by St. Joseph and Abbott Laboratories (Abbott/the Company), the manufacturer of stents Dr. Midei used most often in the

last half of 2008 and first half of 2009. St. Joseph and Abbott were

cooperative with the Committee’s inquiry.

During the Committee’s inquiry, several important facts came to

light. The Committee found:

• Despite the ethical and legal questions surrounding Dr. Midei,

Abbott hired him as a consultant after he was barred from

practicing at St. Joseph. Dr. Midei’s duties for Abbot included,

among other things, helping the Company market its stents in

Japan and working on a safety presentation for Abbott’s newest stent, the Xience V. Dr. Midei was paid $30,623 for this

consulting work. • Abbott paid at least $1,925 for social events at Dr. Midei’s

home, including crab and barbecue dinners. Abbott employees

attended the events during the period that Dr. Midei implanted stents without clinical indication and consequently

may have been medically unnecessary. • According to an internal e-mail written by an Abbott sales representative who worked with Dr. Midei, the volume of stent

procedures diminished in the entire Baltimore region after the

allegations against Dr. Midei were made public. • In response to Baltimore Sun (Sun) columnist Jay Hancock’s

January 22, 2010 article critical of medical device companies

who both manufacture and market, a senior Abbott employee

wrote in an e-mail, ‘‘Don’t you have connections in Balti-
2

2 Update on Federal Investigation and Issues, St. Joseph Medical Center, Feb. 2010, SJMC–

SFC 0001. (See Appendix II, p. 24.) 3 Id.

4Maryland State Board of Physicians Complaint against Dr. Midei at 3. (See Appendix II, p.

27.)5St. Joseph Medical Center, Cardiac Notification Patient Encounters, SJMC–SFC 0569. (See

Appendix II, p. 47.) 6St. Joseph Medical Center Catheterization Review Summary, SJMC–SFC0003. (See Appendix II, p. 49.) 7 Report of the Ad Hoc Investigating Committee Regarding Review of Physician, SJMC–SFC

0545. (See Appendix II, p. 51.)

more????? Someone needs to take this writer outside and kick

his ass! Do I need to send the Philly mob?’’

• St. Joseph billed public and private insurers more than $6.6

million for the almost 600 stent procedures in question. Of that

amount, Medicare paid more than half—$3.8 million.

• Three patients who received notifications that they may have

received a medically unnecessary stent have had medical complications. No deaths were reported to the Committee, but one

patient was referred to surgery due to complications.

• After Dr. Midei was stripped of his privileges to practice at St.

Joseph, he began work at The Prince Salman Heart Center, a

cardiac catheterization lab in Saudi Arabia.

II. Background on Alleged Medically Unnecessary

Stent Procedures

St. Joseph told the Committee that it ‘‘first became aware of a

patient care/quality issue in its Cardiac Catheterization Lab on approximately April 27, 2009.’’ 2 On May 12, 2009, the Hospital

barred Dr. Midei from practicing ‘‘after it was determined that the

complaint had merit.’’ 3 The Maryland Board of Physicians (Board)

began receiving complaints about Dr. Midei alleging ‘‘medical

fraud’’ on November 11, 2008; about 6 months before St. Joseph

barred him from practicing.4 During this gap, between November

2008 and May 2009, Dr. Midei continued to perform cardiac procedures which may have been unnecessary.5

In response to the complaints, St. Joseph hired a panel of experts

to review patient records for those who received stents from Dr.

Midei during the period of January 2007 through May 12, 2009.

The panel reviewed 1,878 cases during three review periods: June

19–21, 2009, October 30–November 1, 2009, and January 22–24,

2010.6 In all, St. Joseph notified 585 patients that they may have

received medically unnecessary cardiac stents. The Hospital’s internal Medical Review Committee concluded Dr. Midei’s actions ‘‘resulted in the substantial likelihood of harm to his patients’’ as his

‘‘placement of stents in patients with no clinical indication for

intervention exposes such patients to the potential for serious complications.’’ 7

On June 12, 2010, the Sun reported that the Board formally accused Dr. Midei:

of ‘‘gross overutilization of health care services’’ and ‘‘willfully making a false report or record in the practice of

medicine,’’ among other violations of state law. . . . The

board’s investigation included detailed reviews of five of

Midei’s cases. In each, Midei wrote in the patient’s records
3

8Tricia Bishop, Towson Cardiologist Faces Professional Charges: Doctor Could Lose License

Over Stent Procedures, BALT. SUN, June 12, 2010. 9 Robert Little, Lawyers See St. Joseph’s Stent Claims Growing: Hospital Notified 585 Patients

of Unnecessary Procedures, but Still More are Coming Forward, TRIB. BUS. NEWS, May 23, 2010. 10St. Joseph Medical Center response to Senate Finance Committee questions received on

Sept. 10, 2010. Plavix is drug prescribed to patients who receive stents in order to prevent blood

clots. See FAQ on the Anticlotting Drug Plavix available from WebMD at http://www.webmd.

com/heart-disease/news/20090403/faq-on-the-anticlotting-drug-plavix. 11 Communication between Committee staff and Dr. William Boden on Oct. 9, 2010.

that they suffered from an 80 percent blockage of a coronary artery, which needed to be propped open with a stent.

But a subsequent review of X-ray images showed less than

50 percent blockage.8

Patients and medical malpractice lawyers have raised concerns

that stent procedures performed by Dr. Midei before January 2007

have not undergone clinical review but may have been implanted

unnecessarily, according to a May 22, 2010, article in the Sun.9 St.

Joseph subsequently explained to the Committee the reason for

limiting its review of Midei’s procedures to those beginning on January 1, 2007:

SJMC does not plan to address allegations that Dr. Midei

improperly implanted stents in patients prior to the review

period of 2007. The review stopped at January 2007 based

on very careful discussion and review as to the well-being

of the affected patients. That is, SJMC needed to determine the time frame where there was a basis for a ‘‘clinical’’ need to know. The literature and the experts that

SJMC consulted in determining the appropriate ‘‘LookBack’’ period, indicate that the risk of clotting, and perhaps any complication (acute thrombosis or restenosis) is

greatly diminished, and is in the realm of 1–2 [percent],

after two years. There is even literature that suggests that

the risk greatly diminished after one year and hence the

need for Plavix for only one year in many cases.10

Dr. William Boden, the clinical chief of the University at Buffalo

Division of Cardiovascular Medicine and the chief of cardiology at

Buffalo General and Millard Fillmore Hospitals, is critical of the

decision by St. Joseph to limit its review of Dr. Midei’s stent procedures. He said:

This is not an issue of the likelihood of restenosis or

subacute/late stent thrombosis. Yes, these procedural complications are temporally related and decrease after 9–12

months. But, that doesn’t explain or exonerate the fact

that Dr. Midei may have been stenting normal or minimally narrowed coronary arteries before 2007. It’s like the

rationale of SJMC is that, since complications were likely

to be low prior to 2007, let’s not go looking for trouble. It’s

not sound logic.

If stents were implanted inappropriately, and if I were one

of the recipients in 2005 or 2006, I would think those patients likewise have a right to know whether something

medically negligent was done to them. This shouldn’t be a

time-dependent analysis, in my view, with a temporal cutoff in 2007.11
4

12Keith J. Winstein, A Simple Health-Care Fix Fizzles Out, WALL ST. J., Feb. 11, 2010. 13 E-mail from Dr. Mark G. Midei to Dr. Charles Simonton, Abbott Vascular Chief Medical

Officer, Apr. 20, 2010. (See Appendix II, p. 57.) 14Tricia Bishop, Cardiologist Sues Hospital Over Stent Allegations, BALT. SUN, Oct. 21, 2010. 15Tricia Bishop, Towson Hospital Settles Kickback Claims, BALT. SUN, Nov. 9, 2010. 16 Id. 17St. Joseph Medical Center, Cardiac Settlement—Charges and Payments, Apr. 8, 2010,

SJMC–SFC0007. (See Appendix II, p. 59.)

Dr. Boden was the lead investigator of COURAGE, a 2007 Department of Veterans Affairs funded study published in the New

England Journal of Medicine. According to the Wall Street Journal,

COURAGE ‘‘shook the world of cardiology’’ when it found that cardiac stent procedures, also referred to as percutaneous coronary

interventions (PCIs) ‘‘usually yield no additional benefit when used

with a cocktail of generic drugs in patients suffering from chronic

chest pain.’’ 12

Despite being barred from employment at St. Joseph, Dr. Midei

was able to find work in another cardiac catheterization lab. In an

April 20, 2010, e-mail, Dr. Midei confided to Abbott Vascular Chief

Medical Officer Dr. Charles Simonton that, ‘‘I am back working in

the lab at the Prince Salman Heart Center in Saudi Arabia.’’ 13

Dr. Midei filed a $60 million lawsuit against St. Joseph on October 21, 2010 alleging that the Hospital’s letters to Midei’s patients

informing them that they may not have needed their stent implantations caused ‘‘irreparable damage’’ to his career.14

On November 9, 2010, St. Joseph reached a settlement with the federal government agreeing ‘‘to pay $22 million to settle federal

claims that it engaged in a decade-long kickback scheme with

Pikesville cardiology group MidAtlantic Cardiovascular Associates,

which was co-founded by Dr. Mark G. Midei.’’ The settlement included ‘‘the repayment of federal funds that St. Joseph received for

‘medically unnecessary’ coronary stents placed by Midei after he

had left MidAtlantic to become a full-time St. Joseph employee

with a seven-figure salary.’’ 15

U.S. Attorney Rod J. Rosenstein and HHS Inspector General

Daniel R. Levinson both stated that kickback schemes can

incentivize doctors to perform medically unnecessary procedures.16

However, the time period of the alleged kickback scheme between

St. Joseph and MidAtlantic Cardiovascular Associates, from 1996

to 2006, does not overlap with the allegations against Dr. Midei for

alleged unnecessary medical procedures, from 2007 to mid-2009.

III. The Cost of Dr. Midei’s Alleged Medically Unnecessary

Cardiac Stent Procedures

The cost to the health care system from the actions of Dr. Midei

had substantial cost to taxpayers. St. Joseph billed public and private insurers more than $6.6 million for almost 600 stent procedures in question. Of that amount, Medicare paid $3,817,567, more

than half.17 This sum does not include the cost related to future

medical complications that may arise as a result of the stent procedures.

In addition to both private and public insurers paying for allegedly medically unnecessary procedures, Dr. Midei’s actions put his

patients at serious risk for complications, according to the St. Joseph Ad Hoc Committee. This Committee was appointed by the St.
5

18 Report of the Ad Hoc Investigating Committee, supra note 7, at 4. (See Appendix II, p. 51.) 19 Ellen Barton, Doing the Right Thing; St. Joseph’s Medical Center Has Handled Questions

About the Use of Stents Appropriately, BALT. SUN, Sept. 8, 2010. 20St. Joseph Medical Center, supra note 10.

Joseph Medical Executive Committee to investigate the alleged unnecessary procedures. The St. Joseph Ad Hoc Committee Report

stated:

Dr. Midei’s practice of placing stents in patients where not

clinically indicated has resulted in the substantial likelihood of harm to his patients. According to the AMF Review Team, the cardiac catheterization itself carries a 1

percent to 5 percent chance of risk, depending on how one

assesses complications. Once the stent is in place, there is

a 1 percent chance of stent thrombosis (i.e., where the

stent closes off the vessel), which carries a 60 percent

chance of mortality. The risk of stent thrombosis increases

to 2.4 percent three years following the intervention. Additionally, patients who receive stents must undergo continued therapy with Plavix and aspirin, each of which carry

their own side effects. Therefore, Dr. Midei’s placement of

stents in patients with no clinical indication for intervention exposes such patients to the potential for serious complications.18

The Committee asked St. Joseph whether any of the notified patients had experienced medical complications. Prior to responding

to the Committee’s questions, on September 7, 2010, Ellen Barton,

Vice President of Governance and Administrative Services for St.

Joseph, disclosed in a Sun Op/Ed: ‘‘To the best of our knowledge,

there have been ‘medical’ complications in only three patients as a

result of the stent procedures.’’ 19 In a subsequent response to the

Committee, St. Joseph explained:

To the best of SJMC’s knowledge, there have been three

‘‘medical’’ complications in patients as a result of the stent

procedures. The greatest risk of complications is within the

first 6 months to a year. However, SJMC does not have access to all these patients’ past and current medical records.

Without complete medical records, it is impossible to determine with finality the ‘‘necessity’’ of the stent, as the percentage of stenosis only is not the determinant for placing

a stent. Likewise, it is not possible to determine with finality if there were complications. SJMC does know that no

deaths resulted from these stent procedures and there was

only one case where a patient was referred to surgery from

the Cardiac Cath lab when it was determined that her condition warranted surgery.20

IV. Biased Peer Review Procedures at St. Joseph

According to Professor Katharine Van Tassel, the author of a law

review article on hospital peer review, ‘‘the term ‘peer review’ describes several distinct activities which are generally performed by

a hospital medical staff committee, all with the goal of maintaining

or improving quality of patient care.’’ One of these activities, mandated by CMS as a condition of participation and by The Joint
6

21Katharine Van Tassel, Hospital Peer Review Standards and Due Process: Moving from Tort

Doctrine Toward Contract Principles Based on Clinical Practice Guidelines. Seton Hall Law Review, Vol. 36, No. 4, 2006; U. of Pittsburgh Legal Studies Research Paper. Available at SSRN:

http://ssrn.com/abstract=1262898. 22 Report of the Maryland Department of Health and Mental Hygiene on Hospital Utilization

and Stents, Sept. 21, 2010. (See Appendix II, p. 61.) 23 Id. (See Appendix II, p. 61.) 24 Id. (See Appendix II, p. 61.) 25Stent Usage by Dr. Mark Midei, CY2006 Q1 thru CY2009 Q2, SJMC–SFC0046. (See Appendix II, p. 71.) 26 Internal Abbott Chart, Top Volume NE Area MD’s in Project Victory Accounts,

ABBT0044568. (See Appendix II, p. 73.) 27 Internal Abbott Document, ‘‘Business Plan Q4’08’’, ABBT0028214. (See Appendix II, p. 75.)

Commission (a major health care accreditation organization) guidelines, ‘‘involves the ongoing collection and evaluation of data regarding the professionalism and competence of each physician who

is a current member of the hospital staff.’’ 21

The Maryland Office of Health Care Quality, the state’s licensing

and certification organization for hospitals, found that the ‘‘hospital’s peer review process permitted Dr. Midei, as Chair of the

Cardiology Department, to select cardiology cases, including his

own, for peer review.’’ 22 St. Joseph has since revised their peer review practices ‘‘to include independent, blinded review of interventional providers and has ensured that clinical heads are neither

selecting nor reviewing their own cases.’’ 23 The Maryland Department of Health and Mental Hygiene recommended in a recent report that the Maryland Office of Health Care Quality ‘‘augment existing standards required of hospital peer review process to include

review of volume and medical necessity’’ to prevent unnecessary

procedures in the future.24

V. Dr. Midei’s Relationship with Abbott

The Committee has been examining financial ties between physicians and the health care industry over the last six years. This

oversight effort laid the groundwork for the passage of the Physician Payments Sunshine Act as part of the Patient Protection and

Affordable Care Act of 2009 requiring pharmaceutical and medical

device companies to report to the government payments to physicians, which are then made publicly available.

A chart provided by St. Joseph shows that Dr. Midei began

heavy use of Abbott brand drug eluting stents in the third quarter

of 2008.25 In fact, he was among the physicians targeted by Abbott

as a high volume user of stents. A 2007 Abbott document marked

‘‘Project Victory’’ ranks Dr. Midei among the ‘‘top volume’’ doctors

in the Northeast.26

It is common practice among pharmaceutical companies and

medical device companies to collaborate with physicians. Additionally, it is common practice for these same companies to cultivate

top volume cardiologists, and this was indeed part of Abbott’s marketing strategy regarding stents. An internal Abbott document labeled ‘‘Business Plan Q4’08’’ has a section titled ‘‘Action Items.’’

One of the ‘‘Action Items’’ was to ‘‘Continue to elevate Mark Midei

and the St. Joseph’s group within the Abbott Corp (Senior [Management] visits, [Medical Advisory Board], research, VIP trips).’’ 27

Abbott documents show that Company officials considered a May

23, 2007, debate between Dr. Midei and Johns Hopkins cardiologist
7

28Project Victory Account Strategy St. Joseph Medical Center, ABBT0038290, Description of

Event, ‘‘Controversies in Cardiology: Drug Eluting Stents versus Medical Therapy,’’

ABBT0152209, and Abbott Employee calendar item, ABBT0000346. (See Appendix II, p. 84.) 29 E-mails between Abbott Executive Vice Present of Medical Devices John Capek to an Abbott

sales representative, Sept. 4, 2008, ABBT0000250. (See Appendix II, p. 93.) 30 Id. (See Appendix II, p. 93.) 31 E-mail from Abbott Executive Vice President of Medical Devices John Capek to Dr. Mark

Midei, Sept. 4, 2008, ABBT0000880. (See Appendix II, p. 95.) 32Letter from an Abbott Regional Sales Manager to an Abbott sales representative,

ABBT0028105. (See Appendix II, p. 97.) 33 Abbott Response to Senate Finance Committee Questions received on Sept. 24, 2010. 34 Andy Nelson’s BBQ, Catering Contract, ABBT0028477. (See Appendix II, p. 99.)

Dr. Stephen Schulman concerning the COURAGE study at a Ruth’s

Chris restaurant in Baltimore a ‘‘business activity.’’ An internal

Abbott document titled ‘‘Project Victory Account Strategy’’ listed:

‘‘Point counterpoint Courage, debate with Dr. Midei.’’ 28

An internal e-mail shows that when Abbott Executive Vice President John Capek learned in August 2008 that Dr. Midei had implanted ‘‘30 stents’’ in a single day, he stated that it ‘‘is the biggest

day I remember hearing about even when the [Bare Metal Stent]

market was the only market.’’ 29

An Abbott sales representative who marketed stents to Dr. Midei

agreed with Capek: ‘‘He must be one of the highest implantors [sic]

thus far.’’ 30

Capek wrote to Dr. Midei: ‘‘I heard thru the grapevine that you

had a truly outstanding day with Xience in the labs on Friday, perhaps settiing [sic] the single day implant record.’’ 31

An Abbott Regional Sales Manager wrote to an Abbott sales representative who worked with Dr. Midei, lauding the sales representative’s success in forming personal relationships with cardiologists. On December 29, 2008, he wrote:

As you prepare to complete another year in the top 5 in

rankings, I want to again congratulate you on this remarkable feat. Moreover, the relationships you have formed at

accounts like St. Joe’s, Union, and Hopkins are hallmarks

of what every rep strives for in their accounts. In my 15

years of being in this business, I have never seen personal

relationships as strong as the ones you have developed

with Dr.’s Mark Midei, [name redacted], and [name redacted].’’ 32

VI. Abbott Reimbursements for Events at Dr. Midei’s Home

In response to Committee questions, Abbott disclosed that it re- imbursed an Abbott employee $1,235 for a barbecue dinner at

Mark Midei’s home on August 31, 2008, two days after Dr. Midei’s

potentially setting the ‘‘single day implant record,’’ as expressed by

Abbott Executive Vice President of Medical Devices John Capek.

Attendees included ‘‘Staff from the catheter lab at St Joseph’s Medical Center, other healthcare professionals from the Baltimore area,

several representatives from Abbott, and representatives from

other manufacturers, and their guests.’’33 The invoice lists an Abbott sales representative as the ‘‘Client/Organization’’ and describes

the event ‘‘Theme’’ as ‘‘Appreciation Q/A #3.’’ 34

In addition to the August 31, 2008, barbecue dinner, Abbott dis- closed to the Committee that it reimbursed an employee $690 for

a July 21, 2008 crab dinner at Dr. Midei’s home attended by Abbott
8

35 Abbott Response to Senate Finance Committee Questions, supra note 33. E-mail from an

Abbott Regional Sales Manager, July 2, 2008, ABBT0001069. (See Appendix II, p. 103.) 36 E-mails between Dr. Midei and Abbott employee, Nov. 24–25, 2009, and Dec. 15, 2010,

ABBT0000866, ABBT0000867, ABBT0000889, ABBT0000891, and ABBT0001670. (See Appendix

II, p. 105.) 37 Abbott Response to Senate Finance Committee Questions, supra note 33. 38 Report of the Ad Hoc Investigating Committee, supra note 7, at 4. 39 E-mail from Dr. Midei to Charles Simonton, July 1, 2009, ABBT0001101. (See Appendix II,

p. 114.) 40 E-mails between the Director of the Abbott Vascular Medical Science Group employee and

Dr. Midei, ABBT0052040. (See Appendix II, p. 116.)

employees in order to discuss ‘‘Abbott Vascular’s products and business strategy.’’ 35

Internal e-mails suggest that Abbott and other medical device

companies may have played some role in financing a ‘‘staff Christmas party’’ at Dr. Midei’s home on December 20, 2008, based upon

a contract in the Committee’s possession. More specifically, Dr.

Midei forwarded a proposed contract and menu for the party to an

Abbott employee. The employee replied, ‘‘I have narrowed down the

caterers. I am reviewing two proposals tonight and will give you all

the information tomorrow morning.’’ In an e-mail dated December

15, 2010, the employee sent Dr. Midei an e-mail with the subject,

‘‘Saturday,’’ which reads: ‘‘Just to give you the total amount due

$9050. So far $4250 has been called in per my last e-mail. Can you

please have the girls call; St Jude—Tony and the CRM side’’, ‘‘Boston—Roger and Kevin’’, and ‘‘Medtronic—Kevin.’’ 36

However, in an e-mail to Committee staff, Abbott stated that it

‘‘has found no evidence that any Abbott employee paid for any expenses associated with this event or sought or received reimbursement for any such expenses.’’ 37

VII. Abbott and Dr. Midei after Allegations of

Medically Unnecessary Procedures

After Dr. Midei was barred from practicing at St. Joseph due to

a determination that he implanted patients with stents that were

‘‘not clinically indicated’’ 38 and may have been medically unnecessary, he contacted Dr. Charles A. Simonton, the Chief Medical Officer at Abbott Vascular, in July 2009. Dr. Midei wrote: ‘‘I’m not sure

if you are aware of my situation in Baltimore, but if you’ve got a

few minutes, I would really appreciate your advice.’’ 39

The Director of the Abbott Vascular Medical Science Group told

Dr. Midei on November 11, 2009, that ‘‘Chuck Simonton and I are

committed to assisting you in any way we can during this transition period. Please do not hesitate to call upon us at any time.’’

Dr. Midei responded: ‘‘. . . I might be interested in working with

you if the opportunity arose. I would not rule out a full time position as my practice has been mortally wounded in Baltimore due

to a toxic political environment.’’ 40

In December 2009, Abbott Senior Vice President Robert ‘‘Chip’’

Hance wrote to another Abbott employee:

Mark talked to me about possibly doing some work for us.

I’m very open to doing some consulting work with him to

see how it might go—either getting the word out in China/
9

41 E-mail from Senior Vice President Robert Hance, Dec. 4, 2009, ABBT0000669. (See Appendix II, p. 118.) 42 Chart of Abbott Payments to Dr. Midei, St. Joseph’s provided by Abbott. (See Appendix II,

p. 120.) 43 E-mail from an Abbott employee, Jan. 7, 2007, ABBT001054. (See Appendix II, p. 124.) 44 E-mail from Abbott Vascular Chief Medical Officer Dr. Charles Simonton, Jan. 12, 2010,

ABBT0000452. (See Appendix II, p. 126.) 45 E-mail from Abbott Divisional Vice President Lance Scott, Jan. 15, 2010, ABBT0000220.

(See Appendix II, p. 128.) 46 E-mail from Abbott employee to Abbott Vascular Chief Medical Officer Dr. Charles

Simonton, Jan. 16, 2010, ABBT0000760. (See Appendix II, p. 134.) 47 E-mail from an Abbott employee, Feb. 1, 2010, ABBT0000218. (See Appendix II, p. 137.) 48 E-mail from Abbott Vascular Chief Medical Officer Dr. Charles Simonton, Jan. 25, 2010,

ABBT0052488. (See Appendix II, p. 139.)

Japan, medical or safety work. I suggested he talk to all

three of us and then we’d regroup after the meeting.41

Abbott paid Dr. Midei $30,623 in consulting fees after he was

forced to resign from St. Joseph. This was ten times the amount

of money he was previously paid by Abbott. In 2008 and 2009, Abbott paid Midei $3,400 and $3,000, respectively, for his work on the

Medical Advisory Board.42

The serious allegations lodged against Dr. Midei regarding the

medically unnecessary implantation of cardiac stents did not appear to deter Abbott’s interest in assisting him. One Abbott employee wrote that employing Dr. Midei was ‘‘the right thing to do

because he helped us so many times over the years.’’ 43

On January 12, 2010, Dr. Simonton wrote an e-mail outlining the

work that Dr. Midei would do for Abbott. He wrote, ‘‘You are aware

of the sensitivities in Baltimore, so would clearly avoid that region,

but please find key physicians or cath labs you’d like him to get

in front of with our data.’’ 44

However, due to the negative press Dr. Midei was receiving in

Baltimore, Abbott decided it was a better strategy not to use Dr.

Midei to market stents in the United States. Abbott Divisional Vice

President Lance Scott wrote to Dr. Simonton and said:

‘‘[Abbott staff] and I discussed this morning and we recommend that we not use Dr. Midei in the US at this time

(the press is just too hot). We recommend that we use Dr.

Midei in the field in Japan/China as well as home office

activities (including slide development, etc.)’’ 45

Abbott also used Dr. Midei to work on a presentation called,

‘‘Lets [sic] talk about [Xience V] Safety.’’ An Abbott Vascular Sales

Trainer wrote in an e-mail to Abbott Vascular Chief Medical Officer: ‘‘I wanted to follow-up after my meeting with Dr Midei yesterday in Baltimore. As you know our primary goal was to review the

‘Lets [sic] talk about XV Safety’ deck that our team has been working on for the upcoming STAR meeting.’’ 46

According to the Abbott Vascular Clinical and Sales Integration

Manager: ‘‘The purpose of this deck is to tell our best Xience V

safety story.’’ 47

Bad publicity caused Dr. Midei’s trip to Japan on behalf of Abbott to help market the Xience V stent to be cut short. Chief Medical Officer Dr. Simonton wrote to Abbott Vascular President Chip

Hance on January 25, 2010 that ‘‘Dr. Midei understands the sensitivities and is returning to Baltimore today.’’ 48
10

49 E-mail from Abbott Vascular Chief Medical Officer Dr. Charles Simonton, Feb. 2, 2010,

ABBT0001107. (See Appendix II, p. 141.) 50Fuster, Topol, and Natel, Atherothrombosis and Coronary Artery Disease, at 1446. (Lipincott

Williams and Wilkins, 2005). 51For FY2004 and FY2005, this included inpatient stays in diagnosis-related groups 517, 526,

and 527. For FY2006 and FY2007, this included inpatient stays in diagnosis-related groups 556,

557, and 558. For FY2008 and FY2009, this included inpatient stays in Medicare-severity diagnosis-related groups 246, 247, 248, and 249. (See Appendix I, p. 17.) 52 CMS Medical Device Data for the Senate Finance Committee. (See Appendix I, p. 17.)

However, his work for Abbott Labs did not stop immediately. Dr.

Simonton instructed an Abbott employee that ‘‘I would continue to

work with him, behind the scenes, at this point. We’ve just decided

not to have him doing any public type work in the U.S. right

now.’’ 49

VIII. Cardiac Stent Usage in the U.S.

Stents as devices for coronary use were introduced into clinical

practice in the mid 1980s. ‘‘By the end of 2002, in the United

States, balloon-expandable stents were being implanted in more

than 90 percent of all interventional coronary procedures, attesting

to the generalized acceptance of this breakthrough technology.’’ 50

According to data provided to the Committee from the Centers

for Medicare and Medicaid Services (CMS), Medicare Part A paid

an estimated $25.7 billion for 1,863,823 inpatient stays where the

patient’s principal diagnosis was heart-related and the patient received a cardiac stent from FY2004 to FY2009.51 Medicare Part B

paid approximately $1.3 billion from CY2005–2009 for 248,116 procedures.52

Set forth below is a chart showing the cost of cardiac stent procedures paid for by Medicare Part A per year from 2004 through

2009.
11

53Keith J. Winstein, supra note 12. 54 Abbott Medical Advisory Board Meeting October 13–14, 2007, Summary Report, January

2008, ABBT0161927. (See Appendix II, p. 143.) 55Shannon Brownlee, Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer,

99 (Bloomsbury, 2007). 56Marilynn Marchione, Stents Overused in Heart Patients, Study Says, AP, Jan. 15, 2009. 57 Anne Harding, Heart Stents Used Twice as Often in U.S. vs. Canada, Reuters, June 15,

2010.

IX. Studies Analyzing Stent Usage

A February 11, 2010, Wall Street Journal article reported that in

the wake of the COURAGE study, ‘‘U.S. stent implants declined 13

percent in the month after the study’s release. But as the headlines

about [COURAGE] faded, stentings soon began to rise again, and

are now back at peak levels of about one million a year, according

to hospital surveyor Millennium Research Group.’’ 53

An internal Abbott report summarizing an Abbott Labs Medical

Advisory Board meeting which took place October 13–14, 2007,

mentioned the national drop in stent procedures following the

COURAGE study. One of the ‘‘key takeaways’’ of the Medical Advisory Board meeting was that panelists ‘‘revealed candidly that

they’re [sic] profession has done a better job promoting PCI than

policing it and that some of these practices have alienated their fellow cardiologists.’’ In addition, Abbott noted,

The [Medical Advisory Board] members were evenly split,

with half thinking the drop in [drug eluding stent] usage

and PCI volume represents a swing in the pendulum and

the other half thinking it represents a new plateau (i.e.,

this was a necessary correction). Many cited the need to

improve relationships with the cardiology community in

order to help turn this around.54

In her recent book on health care, journalist Shannon Brownlee

cites a joint Harvard University and Brown University study of

stent usage from 2003 which notes that ‘‘more than two million

Americans a year find themselves lying on a catheterization table’’

and roughly ‘‘eight hundred thousand of those catheterizations are

considered absolutely necessary. Of the remaining ‘‘1.2 million elective cardiac procedures, at least 160,000 are ‘inappropriate,’ meaning they should not have been done, according to cardiologists’ own

rules for when to put in a stent or do an angioplasty.’’ 55

In January 2009, the Associated Press reported that a New England Journal of Medicine study ‘‘gives fresh evidence that many

people with clogged heart arteries are being treated too often with

stents, and that a simple blood-flow test might help prevent unnecessary care.’’ 56 In addition, Reuters recently reported that a study

published in Circulation, a medical journal published by the American Heart Association, found that, ‘‘U.S. heart patients are more

likely to undergo stenting procedures to clear blocked coronary arteries than Canadians.’’ 57

If it is the case that potentially millions of procedures conducted

in the United States are medically unnecessary, the situation at St.

Joseph may very well be emblematic of a larger problem. Sun columnist Jay Hancock wrote on January 22, 2010:

Thanks to extraordinary promotion and advertising, stents

have become a multibillion-dollar business, substantially
12

58 Jay Hancock, Heart-stent Popularity is Costly in Many Ways, BALT. SUN, Jan. 22, 2010. 59 E-mail from Abbott Vascular Vice President of Global Marketing David Pacitti to Abbott

Divisional Vice President for Sales Sam Conaway, ABBT000237. (See Appendix II, p. 160.) 60 E-mail from an Abbott sales representative, Mar. 9, 2010, ABBT0225906. (See Appendix II,

p. 163.) 61Shannon Brownlee, supra note 49.

contributing to soaring medical-insurance costs and federal

deficits. They’re a perfect illustration of why American

health care costs more but delivers less. 58

In response to the Sun column, Vice President of Global Marketing for Abbott Vascular David C. Pacitti wrote to Abbott Divisional Vice President for Sales Sam L. Conaway: ‘‘Don’t you have

connections in Baltimore????? Someone needs to take this writer

outside and kick his ass! Do I need to send the Philly mob?’’ 59

Similar to the aftermath of the COURAGE trial, the publicity

surrounding Dr. Midei may have prompted other cardiologists in

the Baltimore region to reduce their procedure volume. According

to an Abbott sales representative who marketed stents to Dr.

Midei, the increased scrutiny after the revelations of alleged medically unnecessary stent procedures at St. Joseph led to a decline in

the volume of stent procedures in the entire Baltimore area. The

sales representative wrote in an e-mail:

I did look at a Year on Year comparison through the end

of February (per your request Chal to try to capture true

trends) and the overall decline in numbers were ugly . . .

Although the decline was first noted at the time Dr. Midei

was dismissed of his duties at St. Josephs in May, the

most devastating impact occurred in November into December when the media, [HHS Office of Inspector General]

and lawyers became involved in a very aggressive manner.60

X. Medicare Spending for Medical Device Procedures

CMS provided the following figures for total spending for 2005 to

2009 for diagnosis-related groups (DRGs) related to medical devices

generally. The Medicare DRG system ‘‘pays hospitals a set fee for

each diagnosis, regardless of how much the individual patient actually costs the hospital.’’ 61

The following table shows Medicare Part A payments for medical

device related DRGs.
13

62 CMS Medical Device Data for the Senate Finance Committee. (See Appendix I, p. 17.) 63Gerald Donahoe and Guy King, Estimates of Medical Device Spending in the US, May 2009,

at 2 available at http://www.advamed.org/NR/rdonlyres/6ADAAA5B-BA37-469E-817B-3D61

DEC4E7C8/0/King2009FINALREPORT52909.pdf.

Medicare Part A paid an estimated $108.9 billion for 6.9 million

procedures related to medical devices from FY2004 to FY2009.62

According to an analysis prepared for the Advanced Medical

Technology Association (AdvaMed), total medical device spending

was $131.6 billion in 2006.63

The following table from CMS shows the year by year increases

or decreases in the DRGs associated with medical devices compared

with all DRGs.

CMS believes the swings in payment between FY2006 and

FY2008 reflect the significant changes in the inpatient Prospective

Payment System (PPS) that were occurring during that time; that

is, the transition to cost-based relative weights and to MS-DRGs,

respectively. The increase of 1.90 percent from FY2008 to FY2009

reflects the beginning of more stable payment trends.
14

64The cost estimate for health care waste, fraud, and abuse is from the National Health Care

Anti-Fraud Association. See http://www.nhcaa.org.

The following table reflects changes in average payment per case

for device dependent DRGs and all other DRGs in the aggregate.

XI. Conclusion

Medical devices are miracles of modern medicine that help save

and improve lives. Cardiac stents are among the medical miracles

that can greatly improve someone’s life but can be damaging if they

are used inappropriately and unnecessarily. Equally important, the

Medicare and Medicaid programs are intended to provide medical

devices, like cardiac stents, only to those who need them. In the

case of St. Joseph, Dr. Midei often implanted cardiac stents without clinical indication and many may have been medically unnecessary, potentially putting at least 585 patients in harm’s way.

Due to a failure of its peer review process, St. Joseph was unaware of any problems in its catheterization lab until receiving a

complaint from a patient concerned about the treatment received.

Concerns remain about whether St. Joseph acted appropriately by

limiting the scope of its review of patient records to exclude those

implanted with stents before 2007. Patients may have received

medically unnecessary cardiac stents from Dr. Midei without ever

having been informed by the hospital.

With health care costs soaring at a rate well above other sectors

of the U.S. economy, it is important to examine each element of the

health care sector to identify ways to either moderate cost increases or to reduce costs. The impact on the federal budget of

health care costs also demands that each health care dollar is

spent on necessary medical care only.

This joint staff report explores two practices that put upward

pressure on health care costs. The St. Joseph’s panel of experts

finding that the 585 stents implanted were without clinical indication and probably medically unnecessary is a clear example of potential fraud, waste, and abuse. Fraud, waste, and abuse is estimated to cost the medical sector at least $60 billion a year, or

about 3 percent of health care spending; 64 this report describes an

element of that cost.

The second practice—efforts by medical device and other health

companies to encourage the increased utilization of medical products—is harder to quantify. Accordingly, there is a question that

remains as to whether or not Abbott Laboratories indirectly encouraged Dr. Midei to intensify his use of stents, with unfortunate

results.
15

65Tricia Bishop and Robert Little, St. Joseph, Two Others, Had Highest Stent Rates: Hospitals

in Towson, Baltimore and Takoma Park Lead Maryland in Costly Procedure, BALT. SUN, July

4, 2010.

In addition, one of the deficiencies at St. Joseph discovered by

the Maryland Office of Health Quality officials was that Dr. Midei,

as head of the cardiology department, was allowed to select which

cases were peer reviewed. This raises concerns about peer review

processes in place at hospitals and may require that state governments and medical societies review best practices to strengthen

peer review and ensure that doctors performing procedures are not

in a position to select which cases undergo peer review.

The allegations of medically unnecessary cardiac stent procedures at St. Joseph Medical Center have put the spotlight on potentially improper use of stents by physicians and hospitals. In response to concerns raised by the events at St. Joseph, the Maryland Health Services Cost Review Commission, a state agency responsible for setting Medicare rates in Maryland, is determining

which hospitals have higher than average cardiac stent procedures.65 This effort may be a model to ensure hospitals focus on the

issue of possible cardiac stent overutilization, ensuring that patients are protected from medically unnecessary surgery and tax

dollars are not wasted.

Given that $25.7 billion was spent by Medicare Part A from FY2004–FY2009 on cardiac stent procedures and $108.9 billion was

spent on medical device related procedures during the same period,

the Committee will continue to monitor issues relevant to improper

use of cardiac stents and medical device procedures and perhaps

most importantly the mechanisms in place to identity such situations at the earliest possible time.

(17)

APPENDIX I

MEDICAL DEVICE AND CARDIAC STENT

PAYMENT DATA FROM THE CENTERS

FOR MEDICARE AND MEDICAID SERVICES
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(23)

APPENDIX II

SELECT DOCUMENTS CITED IN THIS REPORT
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