Have some PODs violated the Sunshine Act reporting requirements? Senate Finance Committee seeks answers

Written by Laura Dyrda | March 26, 2019 | Print  |

On March 19, Chairman of the Senate Finance Committee Charles Grassley, R-Iowa, and Senate Finance Committee Ranking Member Ron Wyden, D-Ore., penned a letter to CMS Administrator Seema Verma and Inspector General Daniel Levinson addressing concerns with physician-owned distributorships adhering to the Sunshine Act.

 

A POD arrangement gives physicians ownership shares of an implantable medical device company, and often the devices are used in the physician's specialty or practice.

Five things to know:

1. Mr. Grassley and Mr. Wyden begin the letter by stating that some physician owned distributorships may have violated the Physician Payment Sunshine Act requirements to disclose physician ownership and investment. He calls PODs "inherently suspect," alleging the arrangement could motivate unnecessary procedures and influence device selection.

2. Last August, CMS sent special advisories to PODs reminding them to report physician ownership under the Sunshine Act, which includes monetary penalties for non-compliance.

3. In the letter, the senators asked Ms. Verma and Mr. Levison to address several issues, including:

• Whether HHS OIG reviewed and audited the CMS sunshine database for POD compliance.
• Describe steps HHS OIG has taken, or will take, to ensure POD-related data is accurate.
• Whether HHS OIG updated the Compliance Program Guidance for healthcare organizations to address PODs.
• How HHS OIG investigates claims that a POD failed to report physician investment or ownership.
• Outline enforcement of a March 2013 HHS OIG special fraud alert related to PODs.

The letter also asks CMS and HHS OIG to "commit to conducting a detailed review of Sunshine Act filings to determine the extent to which the 2018 special notices had effect on POD-related disclosures" and provide information on how the Sunshine Act could be improved to ensure physician ownership and investment reporting.

4. The letter requests a response from CMS and HHS OIG by April 15.

5. Mr. Grassley was part of a team that previously requested more information about PODs in 2011; the Senate Finance Committee received a report detailing an increase in spien surgeries at hospitals that purchased devices from PODs. The report also suggested PODs increase the cost of healthcare. The committee subsequently held a hearing in 2015 focused on the potential risks of PODs, according to a Policy & Medicine report.

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