The Senate Finance Committee has raised concerns that certain sellers of implantable medical devices are failing to disclose financial relationships with physicians.
Writing to CMS and its Office of Inspector General, the senators called the relationship between physicians and the organizations, known as physician-owned distributorships (PODs), "inherently suspect" on the grounds that they could taint healthcare decisions with financial incentives.
The senators want CMS and OIG to share details of their attempts to monitor PODs and work with them to ensure physicians comply with reporting requirements.
PODs are organizations that sell implantable devices for use in surgeries. The controversy around the business model centers on the fact that physicians both own stakes in the organizations and use the products they sell. Senators began looking into PODs in 2011, leading to an OIG report that found growth in spinal surgeries at hospitals that work with PODs outstripped that of the broader market.
The passage of time has done little to dispel the Senate Finance Committee's suspicions about PODs. Committee Chairman Charles Grassley, R-Iowa, and top Democrat Ron Wyden of Oregon set out those concerns in a letter to the heads of CMS and OIG.
"This relationship is inherently suspect because it could encourage physicians to perform unnecessary surgeries or to choose a device in which they have a financial interest for the purposes of generating more profit for the POD and thereby themselves," they wrote.
Grassley, who was involved in the 2011 probe into PODs, turned his attention on the organizations after learning that some businesses are failing to disclose physician ownership or investment. That is potentially a breach of the Physician Payment Sunshine Act.
CMS sent notices to physicians and PODs in August to remind them that the Sunshine Act requires them to report POD ownership and associated investment interest payments. The senators want to know if that had an effect on POD-related disclosures and have asked CMS to commit to conducting a detailed review of the matter.
That is one of a handful of requests and questions Grassley and Wyden put to CMS and OIG. The senators also want to know if OIG has performed a detailed audit of the CMS sunshine database to discover whether PODs are meeting their reporting requirements.
The senators want to receive responses by the middle of next month.