Stryker Corporation announced on January 9 that it had set up a third-party administrator claims program related to the June 2012 recall of the Rejuvenate and ABG II modular-neck hip stems. The company also disclosed that it recorded a charge of $174 million during the fourth quarter of 2012 related to the recall.
Stryker Metal-on-Metal Costs Could Reach $390 Million
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After the recall, which was taken due to potential risks associated with fretting and/or corrosion that may lead to adverse local tissue reactions, the company said it intended to reimburse patients for “reasonable and customary” costs of testing and treatment services, including necessary revision surgeries.
Third Party Claims Process
A company spokesperson told OTW that after on-going discussions with customers, the company concluded that a third-party claims procedure would best serve the needs of the patients affected by this voluntary recall and partnered with Broadspire Services, Inc., a leading third-party claims administrator, to manage requests for the reimbursement of medical costs.
The company announcement stated that the ultimate total cost of this matter will depend on many factors that are difficult to predict with the limited information received to date and may vary materially based on the number of and actual costs of patients seeking testing and treatment services, the number of and actual costs of patients requiring revision surgeries, the number of and actual costs to settle lawsuits filed against the company, and the amount of third-party insurance recoveries.
Based on the information that has been received, the company estimates the probable loss to resolve this matter to be in the range of approximately $190 million to $390 million, before third-party insurance recoveries.
The Stryker recall and establishment of a third-party claims program, mirrors the actions taken by DePuy Orthopaedic, Inc. when DePuy recalled its metal-on-metal hip system in 2010.
There are well over 10, 000 pending lawsuits against DePuy, Stryker, Wright Medical Technology, Inc., Biomet, Inc. and Zimmer Holdings over metal-on-metal hip implants.
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Discussion
This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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