|Report: Biomet, Others in Discussions with DOJ|
PRECISION TECHNOLOGY NEWS
Jeffrey Binder recently took over as CEO of Biomet.
Biomet has entered into talks with the U.S. Department of Justice (DOJ) involving its investigation into the company's consulting and professional service agreements, according to an Associated Press report. Biomet received a subpoena from the DOJ more than two years ago related to its agreements with orthopedic surgeons who were using or considering the use of the company's hip and knee implants.
The DOJ hasn't provided an update on its investigation, nor has Biomet revealed the status of the probe. Reports indicate that a resolution could lead to changes in the company's business practices as well as introduce the possibility of more oversight by the government.
In addition to the DOJ probe, Biomet has experienced a series of changes in the past year. Since December, it has been anticipating its move to the private sector via a billion-dollar acquisition by a group of private equity firms. The firm also faced the resignation of senior executives and welcomed Jeffrey Binder as its new chairman and CEO.
Daniel Hann remains as a consultant to Biomet.
Two senior executives, CFO Gregory Hartman and Daniel Hann, executive vice president of administration, left Biomet in March following a backdated stock options scandal. An internal investigation revealed that stock options issued between 1996 and 2006 weren't priced at fair market value. As a result, Biomet must amend its annual report for the fiscal year ending May 31, 2006, and the fiscal quarter that ended August 31, 2006. Hartman and Hann will both remain consultants to the company for a period of time.
In May, the Star-Ledger of Newark, NJ, reported that in addition to Biomet, Smith & Nephew, Stryker, and Zimmer were close to a deal with the DOJ. It also reported that Johnson & Johnson's DePuy Orthopaedics Inc., also a target of the investigation, was holding out. Apparently the crux of the case is that the questionable arrangements were not reported to patients, which potentially violates antikickback statutes related to Medicare. If there were any restitution, it would go to the Medicare program.
However, the Ledger article noted, there are no allegations that the doctors and orthopedics companies involved provided substandard care to patients.