Warning issued on doctors' stakes in device firms

March 26, 2013 by Kelli Kennedy

(AP)—Federal health officials have issued a rare warning about doctors' ownership of shares in medical device companies that allow them to profit from performing surgeries with those products.

The inspector general of the Department of Health and Human Services issued a fraud alert Tuesday that called the practice "inherently suspect" and said it may violate anti-kickback laws.

The agency has only issued a handful of these national fraud alerts in the past 20 years and the warning sends a strong message to the medical industry.

The U.S. warned of an uptick in these doctor-medical device partnerships in 2011, saying they were proliferating in at least 20 states.

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