In the episode, “Medical Device and Physician Arrangements,” Jana Kolarik, a Foley Partner, and co-host Angie Caldwell, PYA Consulting Principal and Tampa Managing Principal, interview Kyle Faget, co-chair of Foley’s Health Care & Life Sciences Sector’s Medical Device & Equipment Area of Focus, and Tynan Kugler, Principal in PYA’s Atlanta office, on the topic of medical device company arrangements with physicians.
In the podcast, Kugler and Faget discuss physician-owned distributorships (PODs), key opinion leader physician arrangements, compliance issues, consulting royalties, auditing of arrangements, and Open Payments data (Sunshine Act).
As defined by Faget, PODs “derive revenue from selling or arranging for the sale of implantable medical devices ordered by their physician-owners for use and procedures by those physician-owners who perform their procedures on their own patients at hospitals or ambulatory surgical centers.” While PODs are not prohibited, scrutiny comes when physician-owners select medical devices because of the revenue-generation potential not necessarily as the best course of action for their patients.
The scrutiny of inherently suspect characteristics of PODs emphasizes the need for diligent arrangements between device companies and physicians that are devoid of conflict of interest, reflective of fair market value, and in line with regulatory compliance.
In the auditing process of a medical device arrangement, Kugler describes areas of scrutiny. “…theoretically an organization should be able to know whether there’s ownership in a distributorship, [but] sometimes that can be difficult to track down.” Using annual conflict of interest forms from providers, reviews of vendor purchases, compliance hotlines, and other sources of information can help an organization assess the ownership. “[This] speaks to how beneficial compliance processes can be,” Kugler says.
Listen to Episode 5 of Let’s Talk Compliance:
The Let’s Talk Compliance podcast series is for healthcare leaders and compliance professionals, as well as providers, suppliers, vendors, and others in the healthcare industry. In each episode, a Foley & Lardner attorney and a PYA advisor discuss a trending compliance topic and address questions they hear most often from clients.
The podcast is part of Foley & Lardner’s Health Care Law Today series. Listeners can subscribe to both series on Apple Podcasts, Spotify, or their preferred podcast app. All episodes of Let’s Talk Compliance also can be found on the PYA website.
If you would like assistance with assessing medical device arrangements, auditing compliance programs, or any other matter related to compliance, regulatory requirements, strategy, or transactions, one of our executives would be happy to assist. You may email them below or call (800) 270-9629.