Physician-Owned Distributors and Agency Guidance: Still Waiting


Agencies' recent responses to Senate call for action on physician-owned distributors offer few details on policies. Stakeholders must await CMS rulemaking and OIG study for possible answers.

Turning the spotlight on physician-owned distributor (POD) arrangements, in June[1] the Senate Finance Committee Minority Staff issued a report (Hatch Report)[2] criticizing physician-owned distributor (POD) arrangements. The report was accompanied by bipartisan letters from five Senators representing the Committees on Finance, Aging, and the Judiciary (the Committees) directing the U.S. Department of Health and Human Services Office of Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS) to study and address the proliferation of PODs.[3] In response, OIG representatives met with Senate staff on July 19, 2011, and outlined the scope of a national study on spine implant PODs in a September 13, 2011 letter to the Committees. On August 10, 2011, CMS responded separately in a letter that provided an update on its Physician Payments Sunshine Act (Sunshine Act) and Accountable Care Organization (ACO) rulemakings without committing to a specific policy position on these provisions' applicability to PODs. These agency letters were recently made publicly available by the Committees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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