Hospitals

Medicare advisers consider tighter rules on doctor-owned medical distributors

By Christine Ayala, The Hill Extra –

Regulators are mulling tightened oversight over physician-owned distributors of medical products, on fears that conflicts of interest could lead to fraud.

Some hospitals have set up barriers to avoid anti-kickback entanglements with device distributors, and the Medicare Payment Advisory Commission (MedPAC) is looking at more specific requirements in congressional recommendations. Some commissioners argue these types of physician-owned distributors of medical products should be outlawed.

At issue are distributors making money by selling devices ordered by their doctor owners for surgical use on their own patients. Physician-owned distributors, or PODs, operate as middlemen, buying a device from manufacturers and selling the device to a hospital at a higher price, although ownership of a distributorship is not always obvious.

The practice developed as a way for physicians to cluster buying power and potentially save on device costs.

Devices from these distributors are bought at the same price or higher than those available from manufacturers, a practice which lead some to call these entities “inherently suspect,” according to a recent Office of Inspector General report.

The medical device industry also sees a need for caution.

 

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Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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