The Wall Street Journal reported today about federal and state investigations into an extensive network of physician-owned distributors. See Surgeons Eyed Over Deals with Medical Device Makers, WSJ July 26, 2013.
There the POD was started by two medical device businessmen who began manufacturing devices that were similar to ones on the market. To enhance distribution, they set up multiple distributors that local physicians invested in. The WSJ reports that tens of millions of dollars were made in these PODs.
The investigations centers on whether the PODs were essentially kickback schemes to gain referrals. Here, a key question seems to be were the investments so small and in such shells as to not be real investments but essentially a means to provide returns. The physician returns were reported in some cases to be 50,000-plus a month.
The article itself centers around a specific surgeon who switched to a POD and who is in the midst of federal and state investigations. The article reports the surgeon's volume increased after investing in the POD.
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