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OIG Work Plan Looks at Physician-Owned Distributorships

Each year, the Department of Health and Human Services Office of Inspector General (OIG) releases a Work Plan for the upcoming fiscal year. The Work Plan outlines reviews and activities that the OIG plans to conduct in the upcoming fiscal year, and shows the current OIG areas of focus. On October 3, 2012, the OIG released its Work Plan for fiscal year 2013.

According to the 2013 OIG Work Plan, the OIG will continue to look into physician-owned distributorships (PODs). The Work Plan states that the OIG will review the high utilization of orthopedic spinal implants, and to what extent physician-owned distributors provide the implants to hospitals associated with high utilization. The review will also address potential conflicts of interest and patient safety concerns posed by the physician-owned distributors.

This continued focus on PODs is consistent with the OIG’s response to the Senate Finance Committee’s Letter setting forth its concerns regarding the risk of Medicare program abuse associated with PODs, which we previously blogged about here.

In light of this increased scrutiny, PODs should carefully review the legality of their structure, as well as the impact on utilization by physicians associated with the POD, with the understanding that a high utilization will cause the POD to undergo increased scrutiny by the OIG.

If you have questions about how the OIG Work Plan could affect you, have concerns about the structure of an existing POD, or are interested in reducing risks in the development of a POD, please contact an experienced Wachler & Associates healthcare attorney at 248-544-0888.