Senate Panel Investigates Medtronic, Inc. for Cancelled Contracts

Bloomberg -- Medtronic Inc. (MDT), the world’s biggest maker of heart devices, is under investigation by Congress for canceling contracts with at least two cost-saving organizations that help hospitals negotiate discounts on medical products.

Senate Finance Committee Chairman Max Baucus announced the inquiry today in an e-mailed statement. Baucus wrote Medtronic Chief Executive Officer William Hawkins asking the Minneapolis- based company to provide information on contracts it held with Novation LLC and Premier Inc., two purchasing groups.

Medicare, the U.S. government health program for the elderly and disabled, spent $502 billion in 2009, according to the Centers for Medicare and Medicaid Services. Spending under the program has risen every year but one since its creation in 1965. Purchasing organizations such as Premier work with hospitals to get discounts on medical supplies ranging from tongue depressors to equipment like spinal and cardiac devices.