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Hatch Releases Analysis Outlining Questionable Legality of Physician Owned Entities

News release: “U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, released a Committee Minority analysis, Physician Owned Distributors (PODs): An Overview of Key Issues and Potential Areas for Congressional Oversight, detailing a spike in the utilization of medical procedures by physicians invested in these entities. Citing these concerns, Hatch spearheaded two separate bipartisan letters to the Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS) Inspector General calling for an investigation. This analysis, conducted by the Senate Finance Committee Minority staff, examines the structure and activities of physician owned distributorships (PODs) within the medical device supply chain. In recent years, there has been an uptick in these arrangements, which allow physician investors to purchase ownership shares in an entity that, in turn, purchases or serves as a medical device distributor for the products the physician utilizes in surgery. Hatch’s analysis, which identifies the rapid proliferation of PODs in at least 20 states, exposes the lack of specific legal guidance issued by the Office of Inspector General for HHS to govern the structure and establishment of PODs and brings into question the utilization and appropriateness of services provided by doctors participating in some of the PODs, particularly with respect to Medicare, which is funded by taxpayers. The Senate Finance Committee has jurisdiction over Medicare and Medicaid.”

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