Medicare advisers consider tighter rules on doctor-owned medical distributors

Medicare advisers consider tighter rules on doctor-owned medical distributors

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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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