Healthcare Business News

NQF committee member paid $11.6M by CareFusion to influence panel's choices, prosecutors say

By Joe Carlson
Posted: January 20, 2014 - 7:30 pm ET

(Story updated at 3:45 p.m. Central on Jan. 21 with comments from Dr. Charles Denham's lawyer.)

Many healthcare companies have been accused of paying kickbacks to influence physicians' medical decisions, but one major supplier allegedly tried to steer an entire industry by influencing the recommendations of the National Quality Forum.

The NQF, which reviews medical evidence and makes recommendations for improving healthcare, acknowledges that a well-known patient safety advocate is alleged to have received millions of dollars to promote a surgical sterilization product while co-chairing an NQF committee that suggested hospitals use that product.

Advertisement | View Media Kit


Federal officials say Dr. Charles Denham, co-chair of NQF's Safe Practices Committee in 2010, received $11.6 million from San Diego-based CareFusion to promote the company's ChloraPrep line of skin-preparation products. Denham's committee at the NQF also recommended surgeons use ChloraPrep products to prevent surgical infections, the NQF said.

“When companies pay kickbacks to doctors, especially doctors involved in setting standards for the healthcare industry, they undermine the integrity of the healthcare system,” Assistant Attorney General Stuart Delery said in a release about the settlement.

The Justice Department identified Denham by name in a news release as the recipient of CareFusion's alleged kickbacks, but Denham has not been charged with a crime or named in any lawsuit related to the matter.

A statement from Denham's attorney, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, said reports that the underlying lawsuit involved Dr. Denham were “blatantly false.”

Denham was not accused of wrong-doing in the whistleblower lawsuit, and Gondelman said Denham has and continues to cooperate with investigators in the case.

An NQF review committee removed the reference to the specific product before final publication of “Safe Practices for Better Healthcare” in 2010.

“An NQF ad hoc review did not find sufficient evidence to support one skin preparation over another,” a statement from the organization said. “The ad hoc review effectively served its role of rapidly responding when a potential issue is identified.”

Denham has twice been named to Modern Healthcare's 50 Most Influential Physician Executives list, most recently in 2012. He's the editor-in-chief of the Journal of Patient Safety, and has long served as the chairman of the Leapfrog Group's Safe Practices Program.

Neither Denham nor the foundation he founded, the Texas Medical Institute of Technology, have had any affiliation with the NQF since March 2010, the forum said.

John Kelly, a former federal prosecutor who is now a managing partner with Bass Berry & Sims in Washington, noted it was unusual that the allegations against CareFusion don't spell out whether the alleged kickback came in the form of a sham professional fee, direct payments or some other means. That could be an indication of future legal action in an ongoing case, he said.

“They don't really explain what it is, but it was clear the government felt strongly that something of that amount was provided to him to influence his activity on the National Quality Forum,” Kelly said.

CareFusion, a spinoff of Cardinal Health, sells a wide range of medical devices including infusion pumps and surgical equipment. In 2013, the 15,000-person company posted $3.6 billion in revenue.

Last April, CareFusion announced that the company had signed a nonprosecution agreement and agreed to pay $41 million to resolve allegations of off-label drug promotion stemming from a whistle-blower lawsuit. The complaint was filed in U.S. District Court in Kansas City, Kan., by the former vice president of regulatory affairs for the company's infection prevention business.

The former executive, Dr. Cynthia Kirk of Lenexa, Kan., accused CareFusion officials of promoting ChloraPrep products for indications not approved by the Food and Drug Administration.

Specifically, the lawsuit alleged, the company publicly said ChloraPrep could be used for the “prevention of infection,” even though the products had only been approved to kill bacteria and there were no data to suggest the antibacterial properties were strong enough to influence clinical infection rates.

CareFusion officials said they were pleased to resolve the case without admitting wrongdoing.

“We have made significant investments during the past several years to improve our quality and compliance systems, including our sales and marketing practices, and will continue to do so as part of our commitment to adhering to the highest standards and aligning with best global practices,” CareFusion Chairman and CEO Kieran Gallahue said when the company paid the settlement Jan. 9.

News of the alleged payments caused the patient-safety organization Leapfrog Group to reassess its publications, a spokeswoman said, but the review found none of the group's guidelines were based on the NQF recommendation in question.

Follow Joe Carlson on Twitter: @MHJCarlson

What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.