Five U.S. senators asked the CMS and HHS' inspector general's office to investigate the structure and activities of physician-owned distributorships. Also known as physician-owned companies or intermediaries, PODs are formed when a physician investor buys an ownership stake in an entity that then purchases or serves as a medical-device distributor for the products a physician uses in surgery. The letters to Dr. Donald Berwick, the CMS administrator, and HHS Inspector General Daniel Levinson were sent in conjunction with a report from the Senate Finance Committee's minority staff indicating most of the distributorships “are operating in a manner that appears to be unethical and illegal,” according to a letter signed by Chairman Max Baucus (D-Mont.), ranking member Orrin Hatch (R-Utah), Herb Kohl (D-Wis.), Bob Corker (R-Tenn.) and Chuck Grassley (R-Iowa).
Late News: Senators request investigation of PODs by CMS, HHS
“We are most concerned about allowing such entities to operate without additional guidance and oversight from your office and/or Congress.” According to the report, PODs operate in at least 20 states, and more than 40 are in California. “The very nature of PODs seem to create financial incentives for physician investors to use those devices that give them the greatest financial return and that, in the process, patient treatment decisions may be based on personal financial gain,” the report's authors wrote.
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