"PODs have a substantial presence in the spinal device market. PODs
provided devices used in nearly a fifth of the spinal surgeries billed to
Medicare in FY 2011, and over a third of the hospitals in our sample
purchased spinal devices from PODs. Many of these hospitals began
purchasing from PODs after 2009. Also, few hospitals in our sample
required physicians to disclose their ownership in device companies,
such as PODs, to their patients.
"In FY 2012, hospitals that purchased from PODs performed more spinal
surgeries and had slightly more complex spinal surgery caseloads than
hospitals that did not purchase from PODs. After they began purchasing
from PODs, hospitals experienced increased rates of growth in the
number of spinal surgeries performed as compared to the growth rate for
hospitals overall. Determining the cause for the increased rate of spinal
procedures was beyond the scope of our review.
"In addition, our findings raise questions about PODs’ claims that their
devices cost less than other suppliers. Within the device categories we
examined, PODs’ devices either cost the same as or more than devices
from companies not owned by physicians. This, combined with the
volume of spinal surgeries we found at hospitals that purchase from
PODs, may increase the cost of spinal surgery to the Medicare program
and beneficiaries over time. Further, hospitals inconsistently required
physicians to disclose ownership interests in PODs to either the hospitals
or their patients. Thus the ability of hospitals and patients to identify
potential conflicts of interest among these providers is reduced.
"The Sunshine Act may improve the ability of hospitals and patients to
identify physicians’ investment in device companies. The Act will
require most PODs to report to CMS all physician ownership and
investment interests.18 CMS plans to list these companies and their
payments on a publicly available Web site.
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