Implications of OIG’s fraud alert on current PODs and their customers and suppliers

As noted in our recent alert, OIG’s recent Special Fraud Alert on Physician-Owned Entities is the strongest statement to date that investing in or doing business with a physician-owned distributor, or POD, is a significant Antikickback law risk, not only for the POD and its physician-investors but for the hospitals and ASCs that purchase from PODs and the manufacturers that sell to them.

Some PODs and their promoters have reacted to the Fraud Alert by attempting to reassure investors, and the hospitals, ASCs, and manufacturers with which the PODs do business, that the Fraud Alert is just predictable “business as usual” from OIG and if a POD was “legal” before the Fraud Alert, it is still legal. Both of these assertions seriously understate the risks to POD participants, suppliers, and customers…

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