, Kingston, NH

October 4, 2012

My Opinion: October 4, 2012

By NH State Representative Mike Kappler

— RAYMOND — This year, HB-1725, an act prohibiting health care practitioner self-referrals for medical devices, was hung up in committee; an amendment to SB-406 was added to establish just such a study committee. Thus the Committee to Study Self-Referrals for Implantable Medical Devices was established, which I was appointed to. This committee was charged to study the issue of health care practitioner self-referrals for implantable medical devices and make recommendations as to any future legislation.

The question was, should surgeons be encouraged and allowed to take an active partnership role in the implantable medical device supply chain, including: invention, manufacturing, and distribution of a product the hospital and doctor(s) would ultimately be using. This practice, known as “physician-owned distributors” (POD) is becoming more popular nationally, but has not reached much into the northeast market yet. There are currently none in New Hampshire.

This POD would create a device, have their member doctor or doctors, recommend and sell the device to the hospital. This same doctor(s) would then do the surgery to implant the device.

Those in favor of PODs claim it is a cost savings to the hospital and the patient, and enhances the quality of the product.

Those opposed to PODs claim that it cuts the competition and allows the doctor(s) to double-dip, by receiving money as a POD member and also as the surgeon doing the surgery. They also claim it encourages the doctor(s) to suggest re-implants to upgrade the implanted device, reportedly up to 6 or 8 times.

After listening to testimony from groups such as The Food and Drug Law Institute, American Health Lawyers Assoc., Medtronic, and various in-state interests, it was determined that there were many pros and cons about allowing such activity, and that the Office of Inspector General (OIG) will continue to work on the legality of POD, with their final report due out in late winter or early spring.

With this in mind, the committee decided it was best to wait for the final report from the OIG, that there is no need for legislation at this time, drafted their final report, and adjourned. The testimonies given on this POD problem to the committee were a very informational, and I was happy to serve on this committee. I volunteered to help monitor the OIG final report and see if we need to do anything later on.

(Editor’s Note: NH State Representative Mike Kappler can be reached at