Increased Government Scrutiny of Physician-Owned Device Distributorships

On March 26, 2013, the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) increased its scrutiny of and pressure on physician-owned entities (particularly medical device distributorships) by issuance of a Special Fraud Alert. Although there is nothing specifically new or different from positions taken previously by the OIG regarding physician-owned distributorships (PODs), the Special Fraud Alert clarifies that the “OIG is concerned about the proliferation of PODs.” In other words, the position previously adopted by the OIG has not prevented physicians and medical device companies from designing arrangements that trouble the OIG.

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