Overlap Between Physician-Owned Hospitals and Physician-Owned Distributors

WHY WE DID THIS STUDY

This work follows up on our October 2013 report Spinal Devices Supplied by Physician Owned Distributors: Overview of Prevalence and Use (OEI-01-11-00660), which found that physician owned distributors (PODs) supplied the devices used in nearly one in five spinal fusion surgeries that were billed to Medicare. When we met with CMS in September 2013 to discuss a draft of the report, agency staff expressed interest in the overlap between owners of physician-owned hospitals and PODs of spinal devices.

HOW WE DID THIS STUDY

We reviewed 12 hospitals in our earlier report that self-identified as physician-owned and reported having purchased spinal devices from PODs. We used publicly available information (such as the Web sites for hospitals and PODs, as well as State business registration websites) and information from CMS's Provider Enrollment, Chain and Ownership System (PECOS) to attempt to determine whether a physician had an ownership interest in both a hospital and a POD that sold spinal devices to the hospital.

WHAT WE FOUND

Using available information, we identified one physician with an ownership interest in both a hospital and a POD. Available information about ownership interests is limited and raises concerns about lack of transparency.

This report does not contain recommendations.