Elimination of GPO protections could reduce health care costs up to $37.5 billion each year
WASHINGTON, DC – Hospitals spend more each year on medical devices and equipment that are purchased through Group Purchasing Organizations (GPOs) than they would if GPOs were properly incentivized according to a recent study commissioned by the Medical Device Manufacturers Association (MDMA). The study empirically shows that GPOs fail to deliver on...
WASHINGTON, DC – Mark Leahey, President and CEO of the Medical Device Manufacturers Association (MDMA) issued the following statement regarding reports by Senator Chuck Grassley and the Government Accountability Office that show no empirical evidence of cost savings by Group Purchasing Organizations (GPOs):
"We thank Senators Grassley, Kohl and Nelson for their leadership and work to ensure that patients and hospitals can purchase the best medical products at...
A Washington Monthly front page story in this month's issue details the troubling practices carried out by some Group Purchasing Orders (GPOs), bringing them under new scrutiny.
The Wall Street Journal followed up on the coverage, and reported that Senator Herb Kohl of Wisconsin – who is the Chairman of the...
A commentary in Forbes Magazine Online this week offers a unique insight into the misaligned incentives of group purchasing organizations. The author, a former executive with a large GPO, comments on how the supplier-funded model of GPOs ultimately inflates costs to the health care system. In addition, he notes that the suppler-funded model results in excess Medicare reimbursements for hospitals, ultimately at the taxpayers’ and insurers’ expense. MDMA continues to press Congress on the need...
Senator Chuck Grassley, Ranking Member of the Senate Finance Committee, Senator Herb Kohl, Chairman of the Senate Aging Committee, and Senator Bill Nelson, a member of the Finance Committee, sent a joint letter to seven group purchasing organizations (GPOs) to inquire about their contracting practices. In the letter, among other requests, the Senators asked for specific information and documentation relating to the GPOs sole-source contracting practices, specific criteria used in determining...
The Massachusetts Department of Public Health (MDPH) issued guidance on the recently implemented pharmaceutical and medical device manufacturer conduct regulations. MDMA is pleased that MDPH clarified that the regulations do not apply to pre-commercial companies. Furthermore, companies without disclosure filings do not have to pay the required $2,000 fee. However, they do require any company interacting with a Massachusetts licensed health care practitioners...
MDMA testified before the House Committee on Small Business this week to describe the anticompetitive problems associated with the supplier-funded GPO model and certain dominant firm conduct. Representing MDMA was Said Hilal, CEO of Applied Medical Resources Group. The purpose of the hearing was to examine the lack of oversight and enforcement by DOJ and FTC of anticompetitive practices across a broad spectrum of industries. Hilal accurately highlighted two...
Within the past three years, investigation and enforcement activity under the federal False Claims Act1 (FCA) and the federal Anti-Kickback Statute2 (AKS) relating to payments made by medical device companies to their customers, typically physicians, has increased dramatically. The September 2007 highly-publicized orthopedic implant case, involving $311 million in total civil settlements, is just one example of investigations and prosecutions in the medical device industry (1 MELR 436, 10/10...
The New York Times reported on Cynthia Fitzgerald, the former Novation employee who filed a qui tam claim against the GPO. The article focuses on Ms. Fitzgerald’s current litigation and explores her complaints against Novation in depth. Ms. Fitzgerald's case highlights some of the broad based problems in the current GPO system, including how hospitals inaccurately report GPO incentives and rebates in their cost reports to Medicare.
The Fort Worth Weekly reported on the recently unsealed qui tam action against Novation, the nation’s largest GPO. The article highlights the case of Cynthia Fitzgerald, a whistleblower and relator in the action against Novation. Ms. Fitzgerald contends that Novation illegally received additional payments and kickbacks from vendors to contract with the GPO. Ms. Fitzgerald was eventually terminated from bringing these claims to her superiors. The article also provides a brief overview of the...
