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Local docs listed in fed’s query

State’s health care professionals got millions in consulting fees

from Baltimore Business Journal – by Sue Schultz , Staff

Date: Monday, November 26, 2007, 12:00am EST – Last Modified: Wednesday, November 21, 2007, 12:58pm EST

A federal anti-kickback settlement with five leading orthopedic medical device makers has revealed the millions spent in consulting fees for doctors, medical associations, hospitals and universities, including a collective $3.7 million to $4.6 million spent in Maryland this year.

The companies — Biomet; DePuy, a subsidiary of Johnson & Johnson; Smith & Nephew; Zimmer; and Stryker — are among the largest manufacturers of medical devices used in hip and knee replacements. The companies agreed to disclose their consulting relationships and payments as part of a September settlement with the U.S. Justice Department, which investigated them for violations of the anti-kickback law in using consulting agreements and payouts to orthopedic surgeons to promote the use of their products.

Four of the U.S.-based companies — Smith & Nephew is based in England, with U.S. operations — agreed to pay nearly $311 million in anti-kickback fines to the U.S. Department of Health and Human Services.

While the disclosure of doctors, hospitals and associations doesn’t necessarily imply the groups took kickbacks, it shows the financial influence manufacturers have on health care professionals and what some say is a growing trend of doctors and health officials seeking them out.

“Doctors may be forced to take more chances here in Maryland to earn a living,” Marty Wasserman, executive director of MedChi, the state’s medical society, said of the list of doctors and other professionals with consulting contracts. “They may be forced to go beyond the normal practice of medicine to continue to serve patients and bring in more revenues.”

Two Baltimore orthopedic surgeons topped the lists of local doctors released by the companies, with Dr. David F. Dalury, of Orthopaedic Associates in Towson, receiving as much as $1.3 million from DePuy. Dr. Michael A. Jacobs, a Baltimore orthopedic surgeon who has privileges at several Baltimore-area hospitals, also received as much as $875,000 combined from Biomet and Smith & Nephew, according to the companies’ Web sites.

Neither Dalury nor Jacobs could be reached for comment.

Wasserman said that in a market with little competition among insurance companies, and doctors struggling to receive adequate reimbursement for services, some may look for opportunities to conduct clinical trials and consulting work in addition to patient care to make more money.

Industry’s latest scrutiny

But questions surrounding this type of compensation and potential conflicts of interest are nothing new to the health care industry.

Over the last few years, the U.S. Justice Department reports it has collected nearly $1.54 billion in settlements and judgments from the industry specifically dealing with pharmaceutical companies and medical device manufacturers.

Those in the industry said the closer examination of these relationships can be both a benefit and a stumbling block.

“The additional scrutiny is good because it points out additional conflicts that need to be dealt with,” said Dr. Bruce Jarrell, vice dean of research and academic affairs for the University of Maryland School of Medicine in Baltimore. “But we need to make sure that scrutiny and regulation don’t shut down research.”

He said the University of Maryland has extensive guidelines covering the disclosure of financial relationships and consulting work, but that the university still needs to review each situation on a case-by-case basis.

For example, the university may look at whether an inventor who holds a patent or corporate interest in a product or device should be allowed to run research and clinical trials on the product. They also have to weigh whether the inventor’s involvement would ultimately benefit patients.

Local hospitals listed in query

Sinai Hospital of Baltimore was listed as a consultant on three of the companies’ Web sites in 2007. The hospital received amounts ranging from $1 to as much as $25,000 for consulting services from Smith & Nephew, and Sinai was listed as a consultant by Biomet although no amount was reported in 2007. Dr. Xin Zhou, listed with Sinai Hospital, also was paid $30,000 in consulting fees by Zimmer.

“Sinai Hospital does a minimal amount of work for orthopedic device manufacturers, for which it receives appropriate compensation,” the hospital responded in an e-mail response to inquiries. “Sinai Hospital’s policy does not prohibit its physicians from performing consulting work or developing new products outside the scope of their employment for Sinai, so long as these activities are done on non-hospital time, proper disclosure occurs, and steps are taken to manage any conflicts of interest that are created.”

Greater Baltimore Medical Center was paid roughly $100 by Zimmer for services provided by Dr. Robert Peroutka, a private practice physician. Peroutka also received $13,600 in consulting fees from Zimmer for his Hunt Valley practice.

“GBMC-employed physicians are governed by several policies addressing business integrity and conflict of interest; however, these policies do not apply to private physicians,” GBMC spokesman Michael Schwartzberg wrote in an e-mail.

The Maryland Board of Physicians, which licenses doctors practicing within the state, doesn’t require doctors to disclose their consulting or financial relationships as part of the licensing process, said Jill Porter, a public policy analyst for the agency.

Consulting Cash

Under its agreement with the U.S. Justice Department, five orthopedic medical device makers disclosed the names of paid consultants and how much each was paid in 2007 (through Oct. 31). Following is a listing of associations, doctors, hospitals, schools and researchers in Maryland who received payment from the companies.


  • Dr. Walter Abendschein, Chevy Chase, $1-$24,999
  • Anne Arundel Medical Center, Annapolis, $1-$24,999
  • Lori Brady, R.N., West River, $1-$24,999
  • Dr. Marc Brassard, Arnold, $1-$24,999
  • Dr. Sridhar Durbhakula, Rockville, $1-$24,999
  • Dr. Frank Ebert, Baltimore, $100,000-$124,999
  • Dr. Michael Jacobs, Baltimore, $825,000-$849,999
  • Montgomery Orthopaedics, Kensington, $1-$24,999
  • Mary Ann Sweeney, P.T., Edgewater, $1-$24,999
  • Dr. Barry Waldman, Baltimore, $25,000-$49,999
  • Also on the list, but no payment made in 2007, Sinai Hospital, services rendered by Dr. Ronald Delanois; and Anne Arundel Health System.

Smith & Nephew

  • Dr. Michael Jacobs, Baltimore, $1-$25,000
  • Dr. Tariq Nayfeh, Baltimore, $25,001-$50,000
  • Sinai Hospital, Baltimore, $1-$25,000
  • Southern Orthopaedic Association, Towson, $1-$25,000
  • Western Orthopedic Association, Towson, $1-$25,000


  • Dr. David Dalury, Baltimore, $25,000-$50,000
  • DFD LLC (Dr. David Dalury), Baltimore, $1 million-$1.25 million
  • Eastern Orthopaedic Association, Towson, $10,000
  • Dr. Clifford Jeng, Baltimore, $6,000
  • North Bay Orthopaedics LLC (Dr. John Prodehl), Harve de Grace, $1,500
  • Orthopaedic Associates Research Foundation, Baltimore, $25,000-$50,000
  • Orthopaedic Research Foundation (Orthopaedic Associates Research Foundation), Baltimore, $25,000-$50,000
  • Dr. Vincent Pellegrini Jr., Baltimore, $75,000-$100,000
  • Dr. Sam Sydney, Annapolis, $75,000-$100,000
  • The Advanced Centers for Orthopaedicsurgery (Dr. David Silber), Owings Mills, $3,450
  • University of Maryland, Baltimore, $75,000-$100,000
  • Western Orthopaedic Association, Towson, $5,000


  • Dr. William P. Cook IV, Joppa, $3,500
  • Greater Baltimore Medical Center (Dr. Robert Peroutka), Baltimore, $100
  • Dr. Robert Peroutka, Hunt Valley, $13,600.
  • Harbor Hospital, Baltimore, $1,987
  • Henry M. Jackson Foundation (Keith Holley), Rockville, $5,915
  • Dr. Marc W. Hungerford, Cockeysville, $75,647
  • Dr. Riyaz H. Jinnah, Taneytown, $500
  • Johns Hopkins University (Drs. Frank Frassica, Marc Hungerford, Simon Mears, Stephen Belkoff, and Lynne Jones, Ph.D.), Baltimore, $70,675
  • Dr. Harpal S. Khanuja, Cockeysville, $39,125
  • Dr. Randall J. Lewis, Bethesda, $181,620
  • Dr, Robert G. Loeffler, Potomac, $19,250
  • Dr. Leslie S. Matthews, Lutherville, $250
  • Robinwood Orthopaedic Specialists (Drs. Bruce Edwards, Donald Patterson, and Michael Winslow), Hagerstown, $2,900
  • Sinai Hospital (Dr. Xin Zhou), Baltimore, $30,000
  • Southern Orthopaedic Association, Towson, $25,000
  • Dr. Anthony Unger, Bethesda, $52,355
  • Union Memorial Hospital, Baltimore, $187,500
  • Dr. Felasfa M. Wodajo, Chevy Chase, $7,835
  • Dr. James E. Wood Jr., Baltimore, $85,595
  • Also included on the list, but no payments made in 2007, Eastern Orthopaedic Association, Towson.


  • Dr. Frank Frassica, Baltimore, $25,000-$50,000
  • Henry M Jackson Foundation, Rockville, $50,000-$75,000
  • Johns Hopkins University (Lynne Jones), Baltimore, $75,000-$100,000
  • Dr. Michael A. Mont, Baltimore, $475,000-$500,000
  • Sinai Hospital (Dr. Michael Mont), Baltimore, $0-$25,000
  • Western Orthopaedic Association, Towson, $25,000-$50,000