The United States Committee on Finance just released that U.S. Senators Orrin Hatch (Republican-Utah), Max Baucus (Democrat-Montana), and Chuck Grassley (Republican-Iowa) announced that a new report from the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) reveals a direct correlation between doctors who have a financial relationship in spinal medical device […]
The United States Committee on Finance just released that U.S. Senators Orrin Hatch (Republican-Utah), Max Baucus (Democrat-Montana), and Chuck Grassley (Republican-Iowa) announced that a new report from the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) reveals a direct correlation between doctors who have a financial relationship in spinal medical device companies—so-called Physician Owned Distributorships (PODs)—and increased spinal fusion surgeries. This has placed patients’ health at risk and is costing taxpayers through increased billings to the Medicare program, the senators noted.
Finance Committee Ranking Member Hatch, Committee Chairman Baucus, and Judiciary Committee Ranking Member Grassley, requested the report after finding that PODs supplied devices that were used in about one in five spinal fusions surgeries and billed to Medicare in fiscal year (FY) 2011. According to the report, in FY 2012, surgeons performed more spinal surgeries at hospitals that purchased from PODs than from those that did not.
The HHS-OIG report’s key findings follow. The complete release can be accessed here:
In a PODs arrangement, physicians purchase ownership interests in the medical device distributor and share in the profits PODs make through sales to hospitals. To date, PODs have been created in least 20 states
The OIG previously issued a warning over fraud risks tied to PODs. In its prior report, the Office indicated that its longstanding guidance “makes clear that the opportunity for a referring physician to earn a profit, including through an investment in an entity for which he or she generates business, could constitute illegal remuneration under the anti-kickback statute,” according to a prior Reuters report. “The anti-kickback statute is violated if even one purpose of the remuneration is to induce such referrals” by healthcare professionals involved in PODs, the report indicated. The language in the report “can’t get any more damning,” Dr. Josh Jennings, an analyst with Cowen & Co, told Reuters previously.