Lexology April 28, 2022
On April 25, 2022, the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) issued a favorable Advisory Opinion regarding a medical device company (Company) in which physicians who order the Company’s products hold a majority ownership interest. The Company manufactures medical device products that may be ordered by the physician owners and a physician spouse of one of the physician owners.
As noted below, the government has long scrutinized physician-owned medical device companies, particularly physician-owned distributors (PODS). Nevertheless, the OIG found that the Company presented a low risk of fraud and abuse, based on a number of factors. Crucially, only a small percentage of the Company’s revenues are generated by orders from the physician-owners...
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