Tuesday, October 26, 2010

POD's Legal or Illegal, You Be The Judge

Having spoken to many industry professionals on the national level, the prevalence of physician owned distributorships has picked-up momentum.  Times are very tough for those poor doctors.  They no longer can earn a respectable living being a physician or a surgeon, today they are compelled in becoming much more than a surgeon, they want to become distributors.  Yet, many people including the legacy companies believe that this is a conflict of interest.  TSB would like to provide a forum to have an intelligent discussion without calling each other names.  When you think of it, it does not serve any purpose.   So here are the questions fellow bloggers;

Do POD's create a conflict of interest that can distort medical decision making because it provides surgeons with an incentive to use implants that will benefit them financially?

How do we know that POD's are actually keeping costs down?

Are POD's negotiating and opting for the best possible product for their patients, or are they seeking the cheapest deal that allow them to maximize their profitability?

With the proliferation of POD's the potential exists for improper inducements.  Therefore, should these ventures be subject to intense scrutiny?

Like most business models, the POD could very well be a legitimate business model, yet, inherently POD's can give rise to a fundamental conflict of interest that places the physician's  financial interest ahead of the patient's best interest.  So what do you think?  Is this a legitimate business model, and will it obsolete the need for having a rep?  Or, will the industry eventually have some sort of hybrid?  You be the Judge, TSB wants to know what you think?

63 comments:

  1. This is an excellent topic and a difficult question to address. Personally I do not believe that they should be illegal however they perhaps should be transparent to the patient. Used in the proper way a POD can lower cost and add income to a surgeons pocket. The underlying issues...

    Does such business change a surgeon's decisions on fusion rates of patients?

    Does such a business create unfair price increase to hospitals for me too products?

    If the answer to each question is “No” why should they be illegal? As with all things the answer depends on whom you are speaking about. Physicians already own hospitals and ambulatory centers. Personally I have yet to meet an honest spinal implant sales person anyway.

    -Nature Boy

    ReplyDelete
    Replies
    1. if a patient dies using their implanted device does he now become included in a product liability case. It seems that his liability exposure has greatly increased. I know of a case with spinal usa coming------------

      Delete
  2. Illegal, no. The best solution for industry, maybe not.

    Hospitals have been shifting costs for staffing, liability, and assets [implants/instrumentation] to companies for decades.

    The current model, in the current economy would seem to be unsustainable for the publicly traded companies who don't want the overhead, the hospitals who want the cost savings (and want to avoid public layoffs), and the surgeons that have to sure up thier payments when reimbursement rates nosedive under obamacare.

    Seems to me to be a confluence of several factors that will force a slow exodus to POD's in the larger markets.

    Whether or not Surgeons exploit it is something else altogether. Heck, 5 years ago docs implanted hardware from whatever company would pay them the most to be a "consultant". In many instances.... THEY STILL DO.

    How are the concerns raised in the post any different?

    ReplyDelete
  3. While PODs have hurt my business, I don't think they are illegal in and of themselves. The biggest issue I have had is that the surgeons are privy to our confidential pricing, giving them an unfair advantage when bidding contracts.

    ReplyDelete
  4. If we are looking at it from a strictly legal standpoint, no. The courts in California have ruled on that, for now.

    PODs have surfaced at the right time, which is for now a time of incredible uncertainty. Whether you're a doc, rep or garbage man, no one likes their pay being cut, and most people will look for ways to supplement that income. PODs, then, appear as a sort of oasis in the desert to the complaining surgeon, which is most of them.
    Is there potential for overtreating? Absolutely. But who's to say, especially when there are so many treatment options to begin with? I've seen 10 docs come up with 8 treatment options for a case study.

    The spine industry, especially the legacy companies, need to release true breakthrough products with quantifiably better results. If that doesn't happen soon, then I don't see the pattern of PODs and increasingly prevalent surgeon consultancies (legal kickbacks, in many cases) changing.

    ReplyDelete
    Replies
    1. well it has happened --sept. 8, 2014--- titan spine now gives a warranty on anterior cervical implant hardware and revision surgery. Which means all other medical hardware for neck implants are not equal. I am not sure how that will effect the FDA 510k program.

      Delete
  5. Wow, seems like a lot of POD'ophiles posting so far.

    Now I'm not a lawyer, but I did stay at a Holiday Inn Express last night.

    Clearly, if a physician chooses a product from his/her POD they recieve a financial benefit. If they make this choice at the expense of another more suitable product, that is a clear conflict of interest and could rise to the level of a Stark Law violation etc.

    It seems to me that it would be the physician's burden to prove the negative of the above, which is likely impossible in most instances whether or not they're doing the right thing.

    Economics aside, I still don't understand how a surgeon makes themself comfortable with this.

    ReplyDelete
    Replies
    1. what is their liability exposure now if the device causes injury or death

      Delete
  6. High volume spine surgeons always have chosen a patient's therapy first and foremost on how much money a given modality brings them, and not on what is best for the patient. Now that the consulting and royalty contracts are becoming harder to get and pay less, it makes perfect sense to start your own POD. The one that continues to be left out of the equation is the patient.

    ReplyDelete
  7. If the DOJ decides to go after this business model, who do they go after? Is it strictly the surgeon owners or also the companies they buy from? The DePuys and Medtronics of the industry have stayed away from this practice while many of the smaller companies have jumped in. The big guys state that moral, ethical, and legal concerns prevent them from going this direction. However, the smaller guys have privy to the same legal rulings/opinions and have decided there are no problems from a corporate liability standpoint, just possibly for the surgeons. Is this a case of the small guys boardering on ilegal activity just to make a buck or is it price preservation by the big ones? If it is strictly price preservation, I see the day coming quickly when there will be massive layoffs at the corporate level as it becomes impossible to fund R&D, Clinical Studies, etc. due to price erosion for generic implants.

    ReplyDelete
  8. Hey Rick Flair,

    You have never met an honest spine rep? If not its your own fault. If you are a surgeon, you have the ability to choose who you work with. Choose wisely next time.

    ReplyDelete
  9. The surgeon gets paid to use a product. PODs are clearly a conflict of interest. Period.

    ReplyDelete
  10. In the US, docs have always courted the conflict of interest temptress- it's called fee-for-service medicine. Do more, get paid more. Simple as that. Implant sales don't even have to enter the equation. Just fusing one extra "marginal" level per procedure can mean a six-figure bump over the course of a year.

    All surgeons learn to strike a balance between income and reasonable treatment based on their own judgement, responsibility and risk tolerance.

    So when this concern about PODs is brought up, the argument is moot. Is it a conflict of interest? - of course it is. But so is the whole field of practice. Every patient interaction contains conflict of interest. If a surgeon can't handle the temptations of a POD, then he shouldn't be practicing at all.

    ReplyDelete
  11. Selling screws isn't about providing research money, it's about paying dividends. PODs will force the price down across the board, but given that screws are essentially commoditized, I'm not sure the conflict of interest argument will hold up. Let's face it... a screw is a screw to the docs regardless of your pitch about the pitch.

    I suppose the big guys will probably stay out of POD's due to their slow moving litigious nature and the Nuva's of tomorrow will jump on the wagon. (Funny how the big dogs tend to avoid things like this and yet jump at kickbacks... Sorry, I mean consulting arrangements.) I can see MDT's herd of lobbyists heading toward Capitol Hill right now. No rush guys... all the politicians are out campaigning for midterms.

    ReplyDelete
  12. SpineDoc hit it on the head. As long as fee for service exists you will always have a number of individuals who try to "max out". I for one hate the fact that I as a rep and the companies I represent up sell a certain technique, procedural add on, or product inclusion for the sole reason that the surgeon can bill for more. The same exists with a POD. There is a financial incentive for the doc to go one way or another and a few PODs I am familiar with in my area use what I consider run of the mill, cheaper implants

    ReplyDelete
  13. Did I hear Spinal USA :)

    ReplyDelete
  14. SpineDoc1, I don't know why, but your use of the phrase "risk tolerance" makes me cringe. Unfortunately, my only source for an explanation comes up empty:

    http://unsuck-it.com/?s=risk+tolerance

    ReplyDelete
  15. It is my understanding that Stark Laws make it illegal for someone to hire a relative of a surgeon because it would be a conflict of interest. How is it possible for a surgeon to distribute to themselves. The logic just isn't there. Someone please educate me.

    ReplyDelete
  16. If a screw is a screw and a plate is a plate, Who cares? Do you think the Adidas Rep complains that Athelete X ( insert name here ) is using Nike and getting paid endorsement dollars to do so?. If the Athelete ( in this case the surgeon ) believes Nike's make him run faster and jump higher then I guess its up to the Adidas rep to make him see the error of his ways.

    I apologize in advance for the bad analogy.

    PS. Can't we as patients say to the doc " I would prefer to have Medtronic or whatever implanted in me.? Patient education is key. Although I know the masses are ill-informed.

    ReplyDelete
  17. "without calling names"
    YOU ARE ALL POOPEY HEADS!!

    Ok, got that out of the way. POD's in my opinion are very much a violation of Stark laws, regardless of what California has ruled (those folks go against the grain on everything).
    I would love to be able to buy a car directly from the manufacturer but I cant, Im not a dealer.

    Dear Mr. Grassley........

    ReplyDelete
  18. That's part of the problem, surgeons think their athletes, CEO's think their athletes. Their not. If you believe that this should be treated as an endorsement then its time surgeons fully disclose each and every company that they are a consultant in, have stock in, or have invested capital in. Legislation on the state level makes them disclose that they have a vested interest in a surgicenter. So why not have some transparency when you enter their office. Show me one pedicle screw whose features and benefits provide a better clinical outcome and I'll believe it. It's not so much the implant, it's the ease of use of the instruments that make a surgeon's intra-oeprative life easier. The bottom line is as long as there is transparency does it really matter if the product is sold via a sales rep or a surgeon?

    ReplyDelete
  19. I have had a doc tell me that he can get better reductions from some other companies but he continues to use the products that his distributor owns...

    ReplyDelete
  20. Most of these scenarios are happening in physician owned facilities as well which is triple dipping to the 10th power!
    Yes Mrs. Johnson, I own the hospital that I am sending you to have your MRI and surgery and am the distributor for the implants that we will be implanting as well. On what F'ing planet does that pass the sniff test????? If any of you think that these guys are making the decisions they are making with the patients best interest in mind and not with their wallets you are ignorant at best and most likely part of the problem. This is not sour grapes on my part because I have no POD's in my area, rather a perspective derived from watching young surgeons go into practice making decisions based on the patients best interest and what they were most comfortable with TO making decisions based purely on financial incentive.

    Signed,
    Kiss da baby

    ReplyDelete
  21. Anonymous 5:38pm, your analogy has at least one critical flaw. Unlike professional athletes who wear the shoes they endorse on their own two feet and at their own risk, surgeons are placing implants into another person's body, at another person's risk, and it's all paid for with another person's money...that person being the patient.

    Contrary to popular belief, surgeons are not entitled to unlimited power by the advanced degrees they possess nor by the training they have completed. Rather, they are entrusted by society to do/recommend what is right for those that do not have either the mental or intellectual capacity to make these decisions independently. To be clear, this seemingly inconvenient truth is much different from the ill-informed philosophy being thrown around on this blog by the pro-POD supporters.

    It is an absolute crime for physicians to take part in these sham-outfits, and there is no doubt in my mind that they will all be held accountable for their actions at some point. In the meantime, however, it seems as though the blood-bath will continue for at least a little while longer.

    ReplyDelete
  22. Unless you have a J.D. after your name, your legal opinion is worthless. Quit whining about PODs and focus on developing new technologies which displace the commodity products that these PODs distribute.

    ReplyDelete
  23. To say that doctors are cheating the system
    by getting in the game is a joke!


    Every one tell a story about the most honorable
    distributor they worked for in their spine career!

    Can't wait for the responses!

    ReplyDelete
  24. Industry needs the opinions and insight of surgeons. Surgeons should be fairly compensated for this expertise. Surgeons do not need (nor should be given the opportunity) to recieve direction from Industry. A POD promotes the latter scenario. Seems pretty straight forward in my mind.

    ReplyDelete
    Replies
    1. wonder why they can not warranty their products---they have had about 15 years to make a screw that dosnt back out or break---why should they if they are guaranteed that another surgery will be required to remove them. something is very wrong with this concept.

      Delete
  25. How is a POD different from a practice that maintains it's own MRI/X-Ray? Or physical therapy? All are used based on surgeon recommendation and likewise compensated. Should a physician not treat a patient because he has a vested interest? Should they also be treated different because they use 510k FDA approved implants that may not have a Medtronic logo on them? I fail to see the difference.

    ReplyDelete
  26. There are a lot of surgeons posting in here.......

    If I take a surgeon customer and his wife to dinner and by law cannot pay for his wife because there is a chance that in doing so I could sway his decision in how he treats his patients then surely it must be ethical for a surgeon to own his own implant distributorship AND hospital AND triple dip the system.

    BWAHHAHAHAHAHAHAHAHAHAHAHAHAHAAHHHHHHAAAAAAAA
    BAAHAHAHAHAHAHAHAHAHAHAHAHAHAHH!!!!

    I digress.......

    ReplyDelete
  27. This conversation is kicken like Roy Ward at Target when pink pants are on sale. Whats Nexxt?

    ReplyDelete
  28. Democrats and Obama will welcome POD's. they like docs who can make money from other sources than procedure fees. the welfare state supports PODs .. Wait until your primary care doc starts selling you antibiotics from his physician owned Pharmacy,
    things are spiraling outta control. and the dude in the white house has no clue

    ReplyDelete
  29. The system is rotten at every level, and beyond repair. The only solution for it is to go completely bankrupt, and rebuild. That may provide a grace period of normalcy and at least adequate patient services. Isn't the Hypocratic oath about them?

    ReplyDelete
  30. As Spinedoc said, the whole field of medicine is rife with conflict of interest, from which drug they prescribe, to which imaging center they refer, PT and implants. Agreed, if they can't choose wisely, then one should rethink their career. As far as the spine centers and ambulatory surgery centers that physicians have been investors in for decades, there is transparency i.e. must meet both federal and state standards for care, must post disclaimer that physicians have a vested financial interest in said center. That is where POD's fall short, transparency. None of the physicians that use POD products in my area make the disclaimer of the financial benefit when using the products as they do with the surgery center/spine center, thus leaving the patient out of the decision making process. As a patient, I believe I have a right to know what the rationale is for the treatment that is being proposed. One physician that dropped out of the POD stated this "if you are not comfortable with seeing your name in the paper for what you are doing, then you ought to rethink. So, to make a short story long, I believe PODs are going to be around in the foreseeable future, I just wish they had to play by the same set of rules that any other vendor must!!!

    ReplyDelete
  31. Does anybody know the status with Spine 360 and Verticor (Interbody Implants) DOJ investigation? I heard over 100 surgeons that consulted for Verticor had grand jury subpoenas and that Spine 360 was being investigated by federal authorities as well. I haven't seen them at recent trade shows. I heard these two companies were connected at the hip.

    ReplyDelete
  32. Who is John Galt?

    ReplyDelete
  33. This has been a very enlightening series of comments. Not perhaps for the truthiness of statements being made, but rather for several conceptual points I hadn't considered.

    The tension I see with PODs, (or for that matter, any physician financial interest in the supply chain of healthcare in 2010) is the legal perspective: what constitutes Stark Law or anti-kickback violations. And the financial: the simple, undeniable fact that with or without reform our healthcare system is financially unsustainable and costs MUST get squeezed out.

    My thinking on the legal perspective has shifted due to some of the comments made (not the least of which if you don't have a JD after your name pipe down). With proper transparency to the patient, I struggle to see the difference between physician owned surgery, imaging centers and regulated PODs. Fundamentally, the risk to patient care does not seem dramatically altered.

    For me, the math breaks down on pricing and the benefit writ large to the economics of spine healthcare. Hospitals and insurers would like to push supply costs to the floor. A POD does not, correct? And do I think that in a large enough sample of physicians a greater than 50% population would choose devices they profit from over ones they do not? Yes. A fact that is subtly corroborated in the research done on physician owned urological ASCs (http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2743534/). So higher pricing, higher surgeon margin, eh hmm, commission.

    So where, or does the detante exist in all of this? Will PODs offer just enough of an incremental savings to keep them off the political radar in the near term? Will the hospital-surgeon-insurer relationships find (again incremental) benefit in the POD vendor opportunity vs. the current supply chain? Too many variables to ponder perhaps. But while one poster criticized California for not being relevant, conventional, political wisdom has tended to be that CA is usually where trends start (just watch medical marijuana start coming to a pharmacy near you).

    In total, the issues of legality in my mind, are dwarfed and consequential to the issues of economics.
    ________
    Oh, and if industry's role is noticeably lacking in this post, well, it's because in a world of ample selection and lack of product differentiation, leverage is gone, and we're all just along for the ride.

    ReplyDelete
    Replies
    1. now that titan spine offers a warranty things will quickly change as well as their product liability exposurer

      Delete
  34. although we;ve come to the end of the road, still i can't let go, it's unnatural, you belong to me i belong to you, ohhhh tothe end of the road

    boyz 2 men

    ReplyDelete
  35. Funniest thing is that docs are driven by the bottom line and at the same time some of the cheapest SOBs I have come across. Unless a company or rep is footing a dinner, event, trip bill (a number in violation of Advamed) they aren't involved. Here's a thought, reach into your wallet and take your wife for the great dinner at the new, great restaurant in town that you haven't been to before. Thats what I do, and I make a tenth of what you make.

    ReplyDelete
  36. I can see a scenario where congress acts on this not because it's right but because the big boys in the industry who make big contributions to their lawmakers make a big stink.
    In our area the POD's are set up so that Group A in one city gets the revenue from Group B in a nearby city and vice-versa. Looks like a scheme to me.

    ReplyDelete
  37. I like the John Galt referance, I am Francisco D'Anconia, but the unfortunate part about this is that doc's will always try to justify for their decisions, right or wrong, and reps will always try to justify for the annual price increase.

    The only way POD's are going to stop is for the same reason the physicians who sold implants to hospitals back in the early 20th century stopped around the 60's....its a pain in the ass to run a distributorship and the legal mumbo jumbo gets pretty thick when a civil suit is filed for malpractice.

    Companies wash their hands of responsibility (since they marketed it correctly) and hospitals fall back on the decisions of the doctor being a sacred cow that they can't be accountable for since they basically run a building and keep the lights on....medical decisions are made by doctors. (everyone of us, doc or rep, knows the total bitch charge nurse that cowers and points her finger at the doc or the rep as soon as the attorneys show up)

    Watch what happens when a doc gets a frivolous (or real) malpractice suit for "emotional scarring" or some crap made up by one of the phone book section attorney's following a failure of a product (no matter what, every company has a failure, nothing is perfect)or the patient is just f'ing crazy and some sleezeball attorney convinces him/her that the doctor is the cause.

    The attorneys will drag that same doctor through the mud, the insurance provider will most likely claim that a claim for malpractice in which a surgeon implants a device he is directly compensated for represents a conflict of interest and deny payment and the bloodsucking reporters will have a hay day with "The Money Hungry Surgeon Near You" story.

    Civil suits will get very nasty....anyone thats been involved with one knows that nothing is sacred and 1000 good, solid decisions are thrown aside for the sake of making some asshole attorney a few hundred grand by making a surgeon look bad. Notice, I didn't say he proved beyond a shadow of a doubt that the surgeon was wrong, just look bad enough that some dipshit filled jury of his "peers" will take pity on the poor schmuck with chronic back pain and award him a tidy parachute to fund his pain killer habit.

    ReplyDelete
  38. Characters from Ayn Rand's novel Atlas Shrugged

    ReplyDelete
  39. i wonder what cnn's dr. sanjay gupta would say about this?

    ReplyDelete
  40. If the docs were really altruistic, they would use there influence to have the manufacturers sell directly to the hospital for the same price they are purchasing their implants. The direct to hospital approach for commodity implants can and has worked.

    The ABSOLUTE FACT is that the docs use the "reduced cost to the hospital" as a political trick to justify their decision to line their own pockets.

    ReplyDelete
  41. It's open season on all spine and orthopedic surgeons. IR's should stretch the type of indications that they perform surgery on, podiatrists and plastic surgeons should now branch off into general ortho i.e. hand, above the ankle etc..., maybe they need to be taught a bit of a lesson by their own peers. Aren't they the first to scream bloody murder when someone attempts to do something that they believe is not justified, or is beyond their skills? You know what they say, don't wish for something that you really don't want. JMO

    ReplyDelete
  42. Musco Man - you were not seriously answering the question about John Galt, were you?

    Enjoy the blog. Haven't heard much on the orthobiologics front lately....seems to be an area of that is almost intentionally overlooked.

    h. rourk

    ReplyDelete
  43. First: Any surgeon who is paid commission for implanting in their own patients is violating both Stark and Anti-Kickback and there is no debating that issue, even though some states have ruled it is ok. Remember that federal law always trumps state law.

    Second: The DOJ is too overwhelmed with the 80M/year Medicare fraud that they are mandated to prosecute first. They admit they don't have enough resources to go after POD's.

    Third: When surgeons get paid well for doing something, they do more of it and that is a fact. That is especially troubling when you see increased levels of surgery with POD surgeons and anyone who denies this last statement has never seen a POD at work.

    Fourth: Don't tell me surgeons use the implants that are right for their patients, as I have seen too many non-POD surgeons leave screws in the canal because they are too lazy to change them. The patient hasn't been the primary concern for a long time. ** There are still a few good, honest and caring surgeons out there but unfortunately they are outnumbered by the bad ones.**

    Fifth: The only way this is going to come to an end is when one of these entitlement, selfish and unethical driven surgeons is sued into oblivion when one of these implants fail and the plaintiff's attorney's uncovers the truth in his decision making.

    Sixth: If you want to be a surgeon, then be a surgeon. If you want to be a rep, then be a rep. The law says clearly you cannot be both.

    Signed:
    Ethical and honest spinal industry representative.

    PS: And no, I don't work for one of the big four.

    ReplyDelete
  44. Every time I go to Midas to get my oil changed, they leave me with a "complimentary" breakdown of everything else they found wrong with my car. Then they try and upsell me on all the maintenance required to fix said problems. I tell them thanks for the new oil and piss off because I don't trust those chumps...

    Most people have blind trust in doctors, without the same skepticism as above what happens when patients get that same "complimentary" list from their doc?

    ReplyDelete
  45. 7:31 is right.
    Also, the doctors definitely should tell their patients. And, guess what... when they do the patients (90%) of them will set there and smile like fools and not give a damn. There isn't anything to hide... frankly, I bet they would be more comfortable with that then some dipshit arrogant rep (and I'm a rep) getting paid on it... also, I bet a lot of patients are ALREADY under the impression the stuff does come from the doctor.
    Where it gets deep (and rotfl funny) is when he says it's revolutionary and/or his invention.

    Mom, sorry... but they are all corrupt... pick one, it doesn't matter. Back surgery: you're screwed for life anyhow.

    ReplyDelete
  46. I know of a group locally that are attempting to start their own POD. Most of them do the bulk of their cases at a PHO. They are attempting to get privledges at another hospital in town, why? Because they have driven prices down so low that a POD wouldn't earn them enough money. Greed, plain and simple.

    I did find this interesting opinion from 2006:

    http://oig.hhs.gov/fraud.pdf

    ReplyDelete
  47. Hey 3:44, if you r looking for opinions from 2006, you r extremely behind the eight ball. Ya think? Opinions from the present day would suffice. What do they say?

    ReplyDelete
  48. http://www.healthpointcapital.com/research/2005/07/28/surgeon_owned_distributorships/

    ReplyDelete
  49. 6:59pm......does this imply that laws from 2005 apply? That follows 5:07 question. As a surgeon, we have different opinions than this. I guess those that follow this ever evolving discussion have the best information.

    ReplyDelete
  50. It doesn't matter if POD's are legal or not legal. Perception is reality and if the patient knows the surgeon is being paid to put in their own hardware....that is an ethical issue. The people running the POD's are not the ethical ones in the spine industry, they are usually the reps that have failed at everything else. The companies who play ball with these guys are bringing down the integrity of the industry. One lawsuit will change this practice in a hurry. The smart companies will stay away.

    ReplyDelete
  51. I've seen a few documents to start a POD and all of them had an offshore legal document attached. Personally, if it's not something that is illegal, why worry and have offshore forms and locations to base the POD from.

    ReplyDelete
  52. I don't think the manufacturers that sell to the POD's are subject to any legal problems. They don't control or condone what the docs and the POD are doing, they are just selling their products and what happens after that is beyond their control. The hospitals, on the other hand, may be subject to prosecution since they know the money they spend to buy from the POD is going directly back to the doctor, which is a kickback from the hospital to appease the doc. What do you think would happen if a hospital put the screws on a POD for better pricing? The docs would get pissed at the hospital and threaten to take their cases somewhere else. The urology group with the lithotripsy machine were conviceted for just that scenario. So to answer another question posed, POD's ultimately do not promote lower cost in the long term. They come in just below current pricing to show a savings, but the hospital is then unable to negotiate for fear of alienating the surgeons.

    Several people here have offered comparative scenarios to the POD, like athletes endorsing shoe companies, but there is one major difference. It is not a felony to wear shoes from a company that endorses you. It is illegal for a physician to prescribe products or services in which he will receive payment. The exact language is as follows:

    Section 1320a-7b(b) provides:
    (1) whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe or rebate (directly or indirectly, overtly or covertly, in cash or in kind - (A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under [Medicare] or a State health care program, or
    (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under [Medicare] or a State health care program,
    shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.

    There is subsequent language indicting whoever pays the remuneration (in any form) to the individual who solicits, receives, etc. This is the part that gets the hospital and the POD itself, but not the manufacturer that sells to the POD since they don't pay anyone, they only bill for the product.

    As far as the imaging comparison, there is a special safe harbor for imaging (and other services) that make that legal with certain provisions. Having said that, it is published by CMS that imaging costs have risen significantly as physician ownership in imaging centers goes up and they have reduced payment accordingly.

    All of the POD models try to skirt thru one of the safe harbors afforded by the anti kickback statue, but the problem is, you have to comply with all of them. The true sniff test is the "single purpose" test which states that of all the reasons a physician may select a certain product, if a "single purpose" is to derive any financial benefit, then the arrangement is illegal.

    ReplyDelete
  53. By the way, I (11:31) am not a lawyer, but I try to educate myself on this as it is becoming more prevalent in my area.

    Another comment I will make is that the conflict of interest and the effect on judgement seems to be far greater than the inherent conflict of the fee for service program. All of us, docs and reps alike, know how hard it is to convert a surgeon to a product if he is comfortable with the product and rep he currently uses. Is there any explanation for the fact that the surgeons in POD's switch all of their product usage overnight? The same docs that beat their chest if the hospital ever dared to asked them to use an alternative due to pricing considerations? They always have the fall back argument that they must advocate for their patient's interest and can't just use whatever is cheapest and most convenient for the hospital, yet when they join the POD, they are all of a sudden concerned with the hospital costs and that a "plate is a plate".

    If you look online, the DOJ, attorneys that specialize in Stark and Anti-Kickback, Healthpoint capital and many others feel this is an illegal practice. The only opinions to the contrary are from the PODs and the docs that own them.

    ReplyDelete
  54. PODs will be judged and prosecuted by geography. A california decision does not translate to a Mass. pass.

    There are Stark violations that are within whenever a medicare beneficiary is treated. There is no safe harbor for the company or surgeon.

    Be sure as the debate continues there will be litigation from malpractice to whistle blower, investigations are ongoing in several states...stay tuned...

    ReplyDelete
  55. Has anyone heard of MediTek Partners in Atlanta, GA? They carry a TLIF cage called Talos. Is this a POD??

    ReplyDelete
  56. For those that support the theory that the big boys develop new technology that is far and away superior. I have a scenario going on right now where an insurance company has polled 12 surgeons about a new technology that FDA and the companies claim is better for Pt.s. 8 surgeons say leave it as investigational. WHY? it may enter fear with their POD? they get paid slightly less for the procedure..... At what point will the technology be excepted if half the surgeons are saying it shouldn't be covered?

    ReplyDelete
    Replies
    1. well as of 2014 titan spine says their devices are permanent and with a warranty. Oh they are also made of titanium as the others. So this indicates that that 2nd surgery or revision surgery is mainly to remove broken hardware and they got paid for removing the faulty implant devices.

      Delete