Here are six things to know:
1. PODs are commonly used by spinal surgeons and others to procure and distribute the medical devices for the procedures they perform.
2. Senate Financial Committee Chairman Orrin Hatch (R-Utah) believes the practice of PODs creates a financial incentive for these physicians to recommend and perform more and more unnecessary surgeries.
3. An October 2013 report from the Office of Inspector General at the Department of Health and Human Services stated there are a few different forms PODs can take on:
- Whether physician-investors practice in the hospitals to which they distribute medical devices.
- Whether they only distribute devices or also manufacture them.
- Which services they offer along with the purchase of their devices.
4. In March 2013, the OIG issued a fraud alert on PODs, calling them “inherently suspect” under federal anti-kickback laws.
5. Mr. Hatch also stated in the report the number of spinal surgeries in hospitals that purchase implantable devices from PODs grows at a faster rate compared to other hospitals. The report also found that physicians with investments in PODs perform, on average, 20 percent more surgeries than their counterparts who don’t have these kinds of financial relationships.
6. At a hearing on PODs last month, Scott Lederhaus, MD, president of the Association for Medical Ethics in Monarch Beach, Calif., noted that according to federal law, physician-owned entities can only be 40 percent owned by physicians and only have 40 percent of their income come from cases the physicians owners perform. He also disputed the idea that PODs could be cost-saving.
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