Johnson & Johnson Taps Third Party to Handle Hip Recall Claims

Johnson & Johnson has hired Broadspire Services Inc. to administer patient claims for out-of-pocket costs associated with the ASR Hip System recall. The recall, which has spawned more than 2,000 lawsuits in state and federal court since it was announced in August 2010, could end up costing J&J billions of dollars.

Industry and legal experts are divided about J&J’s decision to contract out its ASR claims. Some see it as an efficient way to outsource a process that is unrelated to artificial hip production, while others accuse J&J of trying to limit payments while gaining control of medical records and other material that could be used against patients in court.

“I have been doing this work for 35 years and it is almost unprecedented for a large corporate defendant to run out and preemptively attempt to identify potential claimants,” Alex MacDonald, a partner at MacDonald Rothweiler Eisenberg who is not representing clients in the DePuy case, told Reuters.
The law firm has offices in Boston, Mass., and Philadelphia, Pa.

Generally, companies and their lawyers handle recalls directly. Companies typically accept a treating physician’s recommendation to help determine whether a device should be removed from the market or replaced.

In DePuy’s case, it is Broadspire’s physicians, not a patient’s doctor, who will make these decisions. While Broadspire physicians cannot directly override a patient’s doctor regarding treatment, they can decide whether to pay a claim.

“Similar to the process insurance companies use to evaluate claims from subscribers, medical records are collected by Broadspire if a patient requests financial assistance,” Lorie Gawreluk, a spokeswoman for J&J’s DePuy Orthopaedics Inc. division, said in a statement. “Broadspire requires no more information than a typical insurance provider would request, and like an insurance provider, Broadspire has a team of reviewers who review claims.”

But how similar should this process be to that of a standard medical claim? Patients and lawyers argue that there should be differences, considering that insurance companies do not decide whether to reimburse policyholders for medical costs related to a problem caused by the insurance company.
In addition, lawyers are reporting that the amount of information being collected by Broadspire is, in fact, excessive.

“This is an evolving strategy that is outside the norm of what companies have done in the past,” said Edward Blizzard, partner with the Houston, Texas-based law firm Blizzard, McCarthy & Nabers. Blizzard is representing plaintiffs in the case.

“Normally a company would not get the kind of information Broadspire is asking for until a case was in litigation, and even if the case was in litigation, in no circumstance would the defendant be allowed to have their own physician talk to the patient’s physician privately, as Broadspire is demanding,” he said.

DePuy, based in Warsaw, Ind., denies any wrongdoing and insists it is not trying to influence doctors with upfront payment offers, as some critics charge.

“It is standard practice for, and indeed healthcare professionals require, reimbursement for the costs of producing the medical records,” Gawreluk said.

In August 2010, DePuy wrote to orthopedic surgeons asking them to forward to their patients a package of information about the recall. It contained a DePuy-authored form letter from doctor to patient requesting the patient make an appointment to discuss any concerns. The recall package also asked patients to bring with them a signed medical release that gives the company access to personal medical data.

“It made me uncomfortable,” said Mark Barba, an orthopedic surgeon at Rockford Orthopedic Associates, a surgical center in Rockford, Ill. “I’ve never faced anything like that before. Never.”

Broadspire Services manages workers compensation and other medical claims on behalf of insurance companies. It is located in Berkeley Heights, N.J.