Federal Oversight and Self-Regulation

March 30, 2012

GPOs are subject to certain federal laws that HHS, DOJ, and FTC are responsible for enforcing. According to HHS Office of Inspector General (HHS-OIG) officials, since 2004, the office has not routinely exercised its authority to request and review disclosures related to GPOs' contract administrative fees, but it has collected information on GPOs' contract administrative fees while conducting audits of hospitals' cost reports. While HHS-OIG is responsible for enforcing the Anti-Kickback statute, the law and regulation do not require routine monitoring of GPO written agreements and disclosures. HHS-OIG officials told us that even if they requested this information from GPOs, it would not necessarily be sufficient to determine whether a GPO violated the Anti-Kickback statute. Officials from HHS-OIG also told us that, since 2004, it participated in two case investigations with DOJ that involved allegations that certain GPOs did not comply with safe harbor requirements and violated the Anti-Kickback statute. Officials told us that HHS-OIG has not imposed administrative penalties on any GPOs since 2004. DOJ and FTC have investigated complaints related to federal antitrust laws, and we identified one lawsuit filed by DOJ against a GPO in 2007. FTC officials told us that while the agency has investigated GPOs to determine whether their behavior was anticompetitive, the agency has not taken any enforcement action against a GPO since 2004.

The voluntary GPO association—HGPII—has continued its activities for GPOs to self-regulate their business practices, and also added some new activities since our 2010 report.

HGPII members are required to follow a set of principles of ethics and business conduct. HGPII members continue to be required to have a written code of business conduct, be accountable to the public by completing an annual public accountability questionnaire, and share best practices through an annual best practices forum. Subsequent to our August 2010 report, HGPII officials told us that the association formed an ethics advisory council in 2010 to provide advice to its steering committee and member GPOs on best practices and other HGPII activities. In addition, to address the concerns of vendors, HGPII implemented a vendor grievance process in 2010 that allows complaints to be reviewed by a third party provided by the American Arbitration Association. 

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