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PODs Spark a Political War

Joe Cantlupe, for HealthLeaders Media, June 16, 2011

POD proponents lash back, saying what they are doing improves hospital and physician alignment, and undermines the big profits of device makers and "is threatening to a very powerful industry."

"It makes all the sense in the world," says John Steinmann, MD, an orthopedic surgeon based in Redwood, CA, and involved in PODs. "One thing I won't disagree with is there is potential for abuse. We've worked very hard to instruct our models to put in place excellent compliance programs and there isn't one with a shred of abuse. There are individuals, not surgeons, using them for personal financial enrichment. But that's where the discussion should go: This is a model that absolutely makes sense, and how can we establish appropriate safeguards? We've gone a long way toward establishing those."

The blockbuster Senate report charges that in the interest of financial interests, physician investors in PODs may perform more procedures than necessary or may use implants of inferior quality or not best suited to the procedures. Five senators, working in a bipartisan manner, have asked the Inspector General of the Department of Human Services for an investigation.

The senators' letter also asks the IG to review the structure of PODs be reviewed in terms of the federal anti-kickback laws, designed to protect patients and federal healthcare programs form the potential influence of financial arrangements.

"Our main concerns are pretty much expressed in the Senate report," Thomas N. Bulleit, a partner with Hogan Lovells, a law firm based in Washington, D.C., which has represented medical device makers, and staunch opponent of PODS, tells me. "I think on its face it violates the law, and even if it didn't violate the law, (PODs) smell to high heaven," Bulleit says. "It gives the doctor financial incentive to pick one device over another, instead of letting the decision be based on what is right for the patient."

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