Doc-owned dis­trib­u­tors un­der the mi­cro­scope

Modern Healthcare - - THE WEEK AHEAD - —Me­lanie Evans

Physi­cian-owned dis­trib­u­tor­ships (PODs) have been a re­cent fo­cus of in­quiry, lit­i­ga­tion and reg­u­la­tion, and now the Se­nate Fi­nance Com­mit­tee will take up the is­sue.

The dis­trib­u­tor­ships have come un­der scru­tiny for po­ten­tial con­flicts of in­ter­est among physi­cian-own­ers who may im­plant de­vices they sell or hold a stake in hos­pi­tals that buy de­vices. HHS’ Of­fice of In­spec­tor Gen­eral warned in an Au­gust re­port that it may be hard to iden­tify which doc­tors may both own stakes in dis­trib­u­tors and in the hos­pi­tals to which they sell.

A pro­vi­sion of the Af­ford­able Care Act was meant to make it eas­ier to iden­tify POD own­ers. It re­quired man­u­fac­tur­ers and group pur­chas­ing or­ga­ni­za­tions to re­port own­er­ship in­ter­ests to the CMS, which pub­lished the in­for­ma­tion on its Open Pay­ments web­site. But the bad be­hav­ior has con­tin­ued. In May, a Michi­gan doc­tor in a dis­trib­u­tor­ship ad­mit­ted to per­form­ing un­nec­es­sary surgery and pleaded guilty to fraud.

“While the vast ma­jor­ity of doc­tors op­er­ate with the high­est eth­i­cal stan­dards, those with a vested stake in med­i­cal de­vice dis­trib­u­tor­ships raise a num­ber of con­cern­ing ques­tions about the physi­cian’s mo­ti­va­tion in pre­scrib­ing a pro­ce­dure, as well as the over­all cost to the health­care sys­tem,” Sen. Or­rin Hatch (R-Utah), chair­man of the com­mit­tee, and Sen. Ron Wy­den (D-Ore.), the com­mit­tee’s rank­ing mem­ber, said in a joint state­ment.

Wit­nesses at the sched­uled Tues­day hear­ing in­clude ethics ex­perts, a board ad­viser to the Amer­i­can As­so­ci­a­tion of Sur­gi­cal Dis­trib­u­tors and the son of a pa­tient whose sur­geon was af­fil­i­ated with a physi­cian-owned dis­trib­u­tor.

“When physi­cians have a fi­nan­cial in­cen­tive to rec­om­mend and per­form a surgery, a po­ten­tial con­flict of in­ter­est can oc­cur and jeop­ar­dize the health of pa­tients,” the sen­a­tors said.

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