J&J's DePuy pushes back at medical funding for hip implants

Johnson & Johnson's ASR all-metal hip implant--Courtesy of Johnson & Johnson

Johnson & Johnson ($JNJ) is striking back at a surgical funding company for allegedly profiting on patients who are suing J&J over its all-metal hip implants and seeking corrective surgeries, a month after a new report shed light on the funder's questionable dealings with individuals involved in vaginal mesh litigation.

As Reuters reports, J&J's DePuy Orthopaedics unit is asking a federal court to make Texas-based medical funder MedStar reveal information so it can see whether the funder tried to "artificially inflate damages claims" for individuals suing over its all-metal ASR hip implants. Medical funding companies like Medstar cover underinsured or uninsured individuals involved in mass litigation cases by purchasing medical bills at steep discounts from doctors, hospitals or other providers. The funders then agree to pay for patients' corrective surgeries, as long as individuals accept a lien on settlements.

But the liens are often larger than expected, leaving patients or companies paying for corrective surgeries with a large bill. MedStar submitted claims of about $1.5 million for 11 surgeries that should have cost no more than $360,000, DePuy said in a federal court filing seen by the news outlet. And the funder is trying to collect twice as much as it paid to collect patients' medical bills and four times what DePuy would typically pay for care, it added.

MedStar founder Dan Christensen is standing by the company's practices, saying claims in the DePuy hip implant litigation are "usual, customary and reasonable," he told Reuters. But DePuy said it needs to see the funder's records before it pays for care. And if the company doesn't like what it sees, it will leave plaintiffs responsible for picking up the tab, according to the Reuters story.

The pushback comes a little more than a month after information surfaced about the medical funding industry's dealings with patients suing over vaginal mesh devices. At least several hundred women with claims against vaginal mesh manufacturers have used medical funders to finance surgeries, Reuters reported at the time. And in one case, Medstar and its affiliates charged mesh plaintiff Tracy Rizzo more than $60,000 for its services--about three times the amount the company paid to have the plaintiff's implant removed.

"I don't begrudge anybody their share," Rizzo said, as quoted by Reuters. "But when businesses are abusing already injured people, it is greedy, it is wrong and it shouldn't be allowed."

Meanwhile, DePuy is gradually resolving litigation over its all-metal hip implants. In 2010, the company agreed to fork over $2.5 billion to settle thousands of lawsuits claiming injuries by its ASR all-metal hip implants. But J&J/DePuy still face more 6,000 lawsuits over its Pinnacle hip implants, including some cases consolidated in a district court in Texas. When all is said and done, J&J will likely pay upward of $4 billion to resolve its implant cases, Carl Tobias, a product-liability law professor at University of Richmond, said earlier this year.

- read the Reuters story