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Docs Owning Device Companies Have Conflict of Interest: Senate Panel

Posted in Fraud and Abuse, Hospitals and Institutions, Legislation and Public Policy, Life Sciences, Litigation, Medical Devices, State Matters, White Collar

Day Pitney healthcare attorney Eric Fader was quoted in a May 10 article, “Docs Owning Device Companies Have Conflict of Interest: Senate Panel,” that appeared in Bloomberg BNA’s Health Care Daily Report and Health Care Fraud Report. Eric commented on a Senate Finance Committee report, released on May 10, that said spinal surgeons participating in physician-owned distributorships (PODs) saw more patients and performed more surgeries than non-POD surgeons.

The federal government has put pressure on PODs for the past several years, and reports have questioned whether POD participants were acting on inappropriate financial incentives when treating patients. Eric said that while there was not much new information in the latest report, he welcomed increased attention and commentary on the subject because “it’s a difficult area in which to advise law-abiding clients on how to structure arrangements in order to comply with the law and protect themselves.” He predicted that there would be “continued focus on perceived abuses, probably on the state level as well as by the federal government.”

Eric observed that although surgeons who invest in PODs perform more spinal surgeries, on average, that may be in part because physicians who do many such surgeries are more likely to be asked to invest in a POD, or to actively seek out POD investments. Eric concluded, “My feeling is spinal surgeons are among the highest-paid medical practitioners, and it would be extremely foolish for someone earning that much money to assume any legal risk, however small, for a relatively small return from his POD investment.”

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