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BNA Medical Devices Law & Industry Report Guest Article: CMS and OIG Respond to Senate Inquiry on Physician-Owned Distributorships
The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) for the U.S. Department of Health & Human Services have responded to the U.S. Senate’s request for information on physician-owned distributorships (PODs).
Earlier this summer, a bipartisan U.S. Senate committee asked CMS and the OIG to study the proliferation of PODs, citing a lack of regulatory guidance on how these arrangements square with existing federal law (5 MELR 381, 6/15/11). Daniel Levinson, HHS Inspector General, responded by refusing to outlaw PODs, stating that he will instead initiate a national review of the entities. Dr. Donald Berwick, the CMS Administrator, responded that CMS will consider the impact of PODs as it drafts regulations implementing the Patient Protection and Affordable Care Act (PPACA). Physician-owned distributorships are arrangements in which physicians purchase shares in entities that distribute products used in surgeries. They can save hospitals millions of dollars in supply costs and allow physicians to share in the savings. Critics of PODs, however, claim they cause an increase in utilization, especially in spinal fusion surgeries. Due to this criticism, in June 2011 a bipartisan committee of Senators requested that CMS and the OIG examine PODs.
To view the full article, please click the PDF linked below.
BNA Guest Article - CMS and OIG Respond to Senate Inquiry on Physician-Owned Distributorships