MedStar Funding (a surgical funding company) was recently ordered by U.S. District Judge David Katz in Toledo, Ohio to give them their information regarding payments to Johnson & Johnson for artificial hips they had made prior to November 13. This is because they’re being sued by DePuy Orthopedics who says they’re concerned MedStar is attempting to squeeze too much money out of the liens they’ve placed against the personal-injury settlement 11 plaintiffs who’ve had hip replacements are entitled to.
What’s Really Going On?
Katz claims he needs this information to properly assess the liens’ validity. However, this didn’t occur until after the international news agency, Reuters, ran a report about MedStar’s role in a recent pelvic-mesh lawsuit. Herein DePuy said they’d pay $2.5 billion to settle personal-injury claims made by 8,000 people regarding their all-metal ASR hip implants after reports from some patients that these implants caused them pain and joint dislocation.
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DePuy claims MedStar submitted nearly $1.5 million in medical care claims that shouldn’t cost more than $336,000. In their opinion, MedStar is attempting to collect over four times the reasonable cost. Therefore, DePuy believes they should review what MedStar has paid healthcare providers. They believe this information will enable them to decide the portion of MedStar’s lien demands that were related directly to the patients’ surgeries for the ASR hip devices and what amount patients spent for unrelated issues (e.g. neck injuries, psychological evaluations).
Who MedStar Is
It is important to note here that MedStar does pay for operations injured plaintiffs must undergo to correct problems a medical device has caused when the patient can’t afford to pay for it themselves. In such cases, MedStar steps in to buy the patient’s medical bills, at a deep discount, from healthcare providers (e.g. doctors, hospitals). Once the patient settles their lawsuit, MedStar places a lien on the settlement so they can reap a profit.
Founder of MedStar, Dan Christensen, told the courts he never marked up the plaintiff’s invoices. He understood patients turned to them when they were either under insured or uninsured and needed these procedures covered. He believes his claims are both typical and understandable. In fact, he also claims the company retained someone who’s an expert in medical pricing and they said the bills were within 4% of the norm.
3M’s Legal Problems
Unfortunately, this isn’t the first time MedStar has faced problems though. They’ve also faced similar orders when dealing with pelvic-mesh cases. In these cases manufacturers (e.g. Johnson & Johnson, American Medical Systems, and C.R. Bard) obtained both the court records and testimony from deposition about how a representative from MedStar solicited doctors to perform the surgery to remove the mesh. According to Reuters, MedStar’s liens on patients’ settlements in these cases were approximately 10 times what private insurance companies and government programs (e.g. Medicaid) paid for this procedure. MedStar’s argument for this is doctors decide how much a procedure costs, not them.
As for the hip replacement case, Christensen had no further comment. A spokeswoman from DePuy also declined any further comment.Read More