- Doctors with a financial stake in surgical products are more likely to perform surgeries that use those products, a congressional report stated.
- A Senate Finance Committee report reviewed the growth of physician-owned distributorships (POD), businesses that serve as go-betweens for device manufacturers and hospitals. The physician typically receives a commission on each sale.
- The report calls for federal legislation that would require doctors to disclose any product ownership they or their family members have to hospitals and patients.
According to the report, POD surgeons saw 24% more patients than non-POD surgeons and performed spinal fusion surgery nearly twice as frequently. As a percentage of patients seen, they performed surgery at a 44% higher rate than their non-POD counterparts.
“The relationship between doctors [and] their patients should be one characterized by trust and a level of professionalism that is held to the highest standards,” Orrin Hatch (R-UT), Finance Committee chairman, said in a press release. “Unfortunately, when surgeons have a financial interest in medical device companies, the data calls into question whether the best interest of the patient is considered when invasive surgeries are recommended.”
PODs are most common in spinal surgery, with distributorships operating in at least 43 states, but the practice is starting to spread to other fields as well.
In 2013, the HHS Office of Inspector General issued guidance on PODs in the form of a special fraud alert, calling them “inherently suspect.” A number of hospitals and health systems responded by implementing policies to govern such practices; however, they are now cropping up in smaller and rural hospitals, the report stated.
In addition to requiring disclosure of ownership, the report recommended:
- CMS require hospitals and ambulatory surgical centers to review Open Payments data collected under the Physician Payment Sunshine Act and document the data was considered in device purchasing decisions; and
- Law enforcement expand efforts to hunt down and prosecute doctors, PODs and hospitals that violate the law.
The report calls for all hospitals to establish policies that address relationships with PODs and urges CMS to strengthen its Sunshine Act guidance to clarify “the exception from reporting requirements for employment applies only to manufacturers (not GPOs), and only to bona fide employment.”