Article preview from "The Gray Sheet" - April 01, 2013
The March 26 special fraud alert reiterates the HHS watchdog’s “longstanding position 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.”
Article preview from "The Gray Sheet" - April 01, 2013
The HHS Office of the Inspector General issued a special fraud alert
March 26 regarding the “substantial fraud and abuse risk” of physician-owned distributorships, and the dangers OIG says they pose to patient safety.
The special fraud alert reiterates the HHS watchdog’s “longstanding position 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.”
Physician-owned distributorships buy devices from manufacturers and resell them to hospitals and ambulatory surgical centers, often where the physician-owners practice medicine. They are most commonly associated with the orthopedic implants market.
PODs have been on OIG’s radar for some time following inquiries from members of Congress and major device manufacturers, which view the groups as unfair and unethical competition.
In 2011, five senators urged the HHS OIG to investigate the proliferation of PODs and also called on CMS to protect against inappropriate conflicts of interest that may arise from PODs. (See "Senators Seek Scrutiny Of Physician-Owned Device Distributors" — "The Gray Sheet," Jun. 13, 2011.) One of the senators, Orrin Hatch, R-Utah, also issued a report in 2011 about the proliferation of PODs.
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