The legislative findings in the law expressed concern over increases in medical spending of 8.7% between 2002 and 2007. The findings noted evidence that physicians are influenced by the marketing efforts of pharmaceutical companies and that "drug detailing" encourages doctors to prescribe newer, more expensive and potentially more dangerous drugs rather than maintaining evidence-based treatment guidelines. In addition, the findings referenced a 2009 report from the Institute of Medicine of the National Academies stating that acceptance of meals and gifts and other relationships are common between physicians and pharmaceutical, medical device and biotechnology companies and may influence physicians to prescribe a company's medicines.

Sharon Treat, Director of the National Legislative Association on Prescription Drug Prices (NLARx), commented in a press release: "Vermont now joins Minnesota and Massachusetts in tackling head-on the pervasive influence of payments and gifts on medical practitioners through a ban on many gifts. Once again, NLARx members have taken the lead." Several legislators involved with the legislation are NLARx members.


Federal: Hospital Exec Pleads Guilty in "Skidrow" Kickback Scheme

Robert Bourseau, former co-owner and board chairman of City of Angels Medical Center, has pleaded guilty in a United States District Court in Los Angeles to paying illegal kickbacks for patient referrals. According to a press release from the Central California U. S. Attorney's Office, Bourseau has admitted to paying illegal kickbacks as part of a scheme to defraud Medicare and the California state Medi-Cal system.

Bourseau and Dante Nicholson, a former senior vice-president at City of Angels, were indicted earlier this year along with Intercare Health Systems, Inc., the company through which Bourseau and a partner operated City of Angels. The indictment alleged that Intercare, Bourseau, Nicholson and others conspired to recruit homeless people, mostly from Los Angeles' Skid Row, to fraudulently receive unnecessary health services.

Bourseau's guilty plea includes admissions of a scheme to refer the Skid Row Medicare and Medi-Cal beneficiaries for in-patient hospital stays at City of Angels, even if not medically necessary. City of Angels then entered into contracts intended to conceal the illegal kickbacks paid for the referrals and billed Medicare and Medi-Cal for in-patient services to the homeless recruits. Bourseau's charges carry a statutory maximum penalty of 10 years in federal prison and Bourseau, who will be sentenced later this year, has agreed to pay over $4.1 million in restitution.

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