Justice Dep’t Looks Into Possible Wrongdoing in Physician-Owned Distributorships

The U.S. Justice Department is examining physician-owned distributorships (PODs) of medical devices, warning that the influence doctors have over hospital purchasing practices opens the doors for serious conflicts of interest.

Michigan spine surgeon, Dr. Aria Sabit, is at the center of DOJ’s broader investigation of PODs that allow doctors to take a cut of profits on device sales, MassDevice reports.

Sabit, an Apex Medical Technologies shareholder, continued to use the company’s implants despite an obvious conflict of interest, as reported in a Wall Street Journal report.

The Neurosurgery medical director at Michigan’s McLaren Lapeer Region hospital also had operation and distribution privileges at Detroit Medical Center and the Doctor’s Hospital of Michigan, according to the Wall Street Journal.

In Dr. Sabit’s case, the Justice Department has been investigating whether his financial interest in the devices spurred him to perform unnecessary surgeries or contributed to an onset of patient complications.

Twenty-eight former patients and/or their families have sued Dr. Sabit in Ventura Superior Court, alleging negligent acts ranging from misplacing implants in their spines to performing unnecessary extensive surgeries. Dr. Sabit has settled 11 of the lawsuits; one was dismissed, and 16 are still pending.

The Department of Health and Human Services’ Office of Inspector General issued a special fraud alert about PODs, warning that they “pose dangers to patient safety” by inducing surgeons to favor devices they profit from and to do more procedures than necessary in order to use more devices, the Wall Street Journal reports.

Does any of this sound familiar?  This is similar to when Radiologists owned MRI centers and oversight committees found that unnecessary procedures were being performed and being billed to Medicare.  After an investigation was completed, legislation was enacted prohibiting any type of self-referral.  Do you think doctors should have any financial gain other than to get paid for their professional service? Would you consider Dr. Sabit’s use of a device that is made by a company of which he has a financial interest in similar to a self-referral relationship? Tell us what you think about this.

For more information, you can contact one of our Gacovino Lake attorneys at 1-800-246-HURT (4878).

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