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Medical News and Perspectives
April 24, 2013

HHS: Physician-Owned Device Firms a Fraud Risk

JAMA. 2013;309(16):1670. doi:10.1001/jama.2013.4236

Physician ownership of companies that sell devices that are subsequently implanted into the owner-physician's patients are a threat to patient safety and pose a high risk of financial fraud, according to a special fraud alert issued March 26 by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) (

The warning is the latest communication from the OIG indicating that arrangements through which physicians profit from use of a particular device by implanting it themselves or referring patients to others for implantation may pose a serious conflict of interest and violate federal law. The alert focuses on so-called physician-owned distributorships (PODs), which are “entities that derive revenue from selling or arranging the sale of implantable medical devices ordered by their physician-owners” for use on the physician-owners' patients at a hospital or ambulatory surgical center.

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