Part B Insider (Multispecialty) Coding Alert

Published on Sun Dec 03, 2006 PDF

OIG has a bee in its bonnet about doctors investng in devices

Like the tycoon in the old Remington shave commercials, your doctor may like a medical gadget so much that he buys the company that makes it. But in that case, you could be buying into a whole world of legal woe, experts warn.

The HHS Office of Inspector General (OIG) rushed to respond Oct. 6 to a letter from trade association AdvaMed asking for guidance about doctors investing in joint ventures involving medical devices. The OIG has been seeing a lot of doctors investing in medical device makers and distributors, including group purchasing organizations (GPOs), and the watchdog is growling.

The OIG's landmark 1989 Special Fraud Alert on Joint Ventures, a touchstone of physician compliance, applies to these ventures, the agency warned.

-It is an important reminder that the device industry is subject to the same fraud and abuse guidance that applies to other health care industries,- says attorney Kathleen McDermott with Blank Rome in Washington, DC.

Hot button: Your doctor can't receive more money for sending more patients to the company he has invested in, the OIG warns.

-There's been a lot of discussion about joint venture transactions, and the OIG just wanted to remind folks that there is guidance out there,- says Portland, OR attorney Mark Bonanno. A good guide is: Doctors should never profit from the -volume or value- of their patient referrals, says Bonanno.

-There has been, in fact, a proliferation of arrangements that raise serious questions about anti-kickback compliance,- says McDermott. These include physicians investing in GPOs as well as imaging centers. -Physicians in some sectors have been very entrepreneurial, which is not necessarily wrong.-

The OIG seems to be especially concerned when -the physician is in a position to either purchase the device or influence the purchase of the device,- says AdvaMed Counsel Chris White. The OIG guidance seems to apply most of all to common arrangements in the orthopedic and cardiology specialties, with doctors investing in implantable spinal rods and other devices.