The convergence of medical device sales, consulting, and financial modeling has created a compliance flashpoint in radiation oncology. Once distinct functions — hardware sales, billing guidance, and ROI modeling — are now bundled under one corporate umbrella. While marketed as “value-added,” these arrangements risk antitrust violations, conflicts of interest, and exposure under the False Claims Act, Anti-Kickback Statute, and other federal laws. When vendors design reimbursement pathways or financial projections tied to their own devices, objectivity collapses, and hospitals inherit the liability.
This erosion of boundaries echoes the early 2000s pharmaceutical crisis. Pharma was forced to establish firm legal and ethical firewalls — separating sales, education, and consulting — after years of enforcement actions against manufacturers that blurred influence with advice. Device manufacturers have yet to adopt comparable governance structures, despite now wielding equal power over clinical, operational, and financial decisions in hospitals.
Hospitals that rely on vendor-created ROI models or bundled consulting services are not performing true due diligence — they are outsourcing it. Independent third-party review is no longer optional; it is a legal safeguard. Every purchasing or service engagement must be scrutinized for compliance, independence, and accuracy.
The medical device industry should operate under the same compliance rigor as pharma. Firewalls between sales, consulting, and financial advisory functions are essential to preserve market integrity and institutional trust. Without them, hospitals face the audits, repayments, and reputational damage, while vendors may walk away protected or with possible legal accountability. The standard of conduct must evolve — because when business lines blur, the only party left exposed is the provider.
What Does it Cost
When medical device vendors or manufacturers provide false or inflated financial projections, the consequences for hospitals and departments can be substantial—both financially and operationally. Overstated return-on-investment (ROI) models or unrealistic utilization assumptions often lead hospitals to purchase or lease equipment that never meets revenue expectations. These inaccurate forecasts can lock organizations into multi-year financing or leasing agreements, leaving millions of dollars in stranded capital, particularly when payer reimbursement or patient volume fails to match vendor claims.
Departments may also face significant budget overruns as vendors frequently underestimate ongoing costs such as maintenance contracts, software fees, consumables, or additional staffing needs. These unplanned expenses can erode margins, force reallocation of operational funds, and diminish the financial performance of the overall service line.
In addition to financial loss, inaccurate projections disrupt workforce efficiency and workflow planning. Departments often restructure staffing or scheduling based on vendor-promised automation or throughput gains that never materialize, resulting in inefficiencies, overtime costs, and staff frustration. The problem is compounded when vendors misrepresent reimbursement potential or billing pathways, such as claiming eligibility for new CPT codes or bundled payments that are not recognized by CMS or commercial payers. This exposes hospitals to compliance risks, claim denials, and potential audit findings when documentation and regulatory alignment fall short of the assumptions used in the vendor’s pro forma.
Strategically, these missteps divert limited capital away from higher-yield investments—such as imaging expansion, AI infrastructure, or workforce development—creating long-term opportunity costs. The erosion of trust between clinical, financial, and executive teams that follows can also slow future innovation adoption and harm vendor relationships. Ultimately, inaccurate or misleading vendor financial projections can cost hospitals or freestanding departments an estimated 10–25% of a project’s total value in unrealized ROI, operational inefficiencies, compliance exposure, and lost strategic opportunity.
The Big Issue
Medical device vendors often inflate financial projections because their business models are increasingly tied to vendor-backed financing rather than traditional bank lending. When hospitals or departments finance equipment through the vendor’s own financial arm, the device sale and the loan approval process become deeply intertwined. The financing entity requires projections that demonstrate strong revenue potential and short payback periods to justify credit risk. If the actual forecast—based on realistic utilization, payer mix, and reimbursement rates—appears weak, the financing arm would likely deny approval or impose stricter lending terms.
This creates a clear conflict of interest: the same vendor that benefits from selling the device is also producing the financial assumptions used to “validate” its affordability. In practice, vendors often inflate volume projections, overstate reimbursement rates, and understate operating costs to make their proposals appear financially sound. Hospitals and departments then make capital commitments based on optimistic, sometimes fabricated, assumptions designed to secure internal approval and financing. The result is a systemic risk where vendor financing relies on projections that are never independently vetted, leaving hospitals saddled with underperforming assets and long-term debt obligations built on misleading numbers.
Stay Informed on Code Changes
We have definitely seen an increase in vendors testing the waters on consulting and giving advice on billing, financial, and revenue. This is a space that pharma has distinct boundaries around. We do not see that on the medical device side. It is imperative to have a 3rd party evaluation on what has been marketed or advertised.
The Code Changes are coming and as mentioned in our webinars; this is and has been a sales opportunity. We do not know what the final rule is going to clarify when it comes to making any capital purchasing decisions. What happens to all of these technologies – both hardware and software – when they are no longer billable?
Bottom line
Due diligence is important, and this should not be driven from Sales.