Healthcare Group Purchasing Organizations, or GPOs, are feeling the investigative heat from some members of Congress.
As the New York Times reported yesterday, three U.S. senators sent letters to the top 7 healthcare GPOs this week, "demanding detailed information about their business practices, including how they are paid, what services they perform besides picking brands and negotiating prices, and how their revenues are affected when an affiliated hospital buys supplies on its own instead of using the group contract."
The senators are also asking for copies of the contracts that GPOs sign with industry vendors.
The three senators - Herb Kohl (D - Wis.), Charles Grassley (R - Iowa) and Bill Nelson, D - Fla.) - appear concerned with the opaqueness of the GPO buying process, as "the purchasing companies’ operating expenses are usually paid by the manufacturers sitting across the bargaining table, leaving them open to accusations of steering huge blocks of institutional business to the vendors willing to pay the most."
The senators "want to know whether vendors are using the contracting companies to quietly channel money and in-kind donations to hospitals, building brand loyalty at taxpayer expense."
Will Congress revisit the "safe harbor" provision that protects GPOs from Medicare’s law against kickbacks that bars vendors from paying the companies that award them contracts?
Many hospital officials I speak with love their GPOs, but there are some vendors out there that decidely do not. On whose side do you fall?