Six years after conflict-of-interest allegations prompted ongoing reforms among group purchasing organizations (GPOs) in the healthcare industry, Congress still hasn’t closed a controversial loophole, critics say.
At issue is a regulation that creates a “safe harbor” from antitrust laws permitting what would otherwise be considered illegal kickbacks between suppliers and buyers. The “kickback” occurs during this scenario: Hospitals join the GPOs, which negotiate group contracts with manufacturers for supplies ranging from syringes to operating tables. The manufacturers pay “administrative fees” to the GPOs — the very organizations responsible for evaluating and selecting products from competing manufacturers.
A kickback, or a discount rewarding the efficiency of group contracting?