Can healthcare companies create programs for doctors while avoiding anti-kickback liability? | Thompson Coburn LLP


Spurred by aggressive anti-kickback law enforcement, many pharmaceutical and medical device companies are reconsidering physician-related programs to avoid potential liability. But while DOJ enforcement remains high, you can create programs that achieve your company’s goals without breaking the law.

The Anti-Kickback Act makes it a criminal offense to knowingly and intentionally solicit, receive, offer or make payment to induce or reward referrals or orders for reimbursable items or services by a federal health care program. Civil suits may also be brought under the law.

We have seen an increase in aggressive enforcement by the Department of Justice in recent months. But it’s still possible to create legally compliant programs without abandoning your business goals.

Recent DOJ Enforcement Actions and Civil Lawsuits

A well-known example of anti-kickback enforcement was Purdue Pharma’s 2020 guilty plea to two counts of conspiracy to violate federal anti-kickback law and its agreement to a $2.8 billion civil settlement. dollars tied to his drug OxyContin.

In 2021, Athenahealth agreed to pay $18.25 million to resolve allegations that it paid illegal kickbacks through three marketing schemes. These programs included all-expenses-paid trips to attend major sporting and entertainment events, including the Masters Tournament and the Kentucky Derby. In another “lead generation” program, the company paid up to $3,000 for each physician who signed up for Athena’s services. In the third scheme, the company paid discontinuing competitors to refer their customers to Athena.

In May 2022, a Dallas federal jury convicted the owners and operators of four orthopedic brace suppliers in Texas and Arkansas for a $6.5 million illegal kickback scheme, including violations of federal anti-kickback law. According to the DOJ, the defendants covered up Medicare’s fraudulent scheme by entering into sham deals with purported marketing companies that characterized payments for doctors’ prescriptions as “marketing” expenses.

When sentenced in September 2022, the owners of the orthotics supply companies each face 55 years in prison for conspiracy to defraud the United States, offering and paying illegal bribes for health care, and seven anti-kickback law violations.

The DOJ’s concerns about these issues are not recent. In November 2020, the Office of Inspector General of the Department of Health and Human Services issued a Special Fraud Alert on “Speaker Programs”defined as “Company-sponsored events at which a physician or other healthcare professional (collectively, “HCP”) makes a speech or presentation to other healthcare professionals about a drug or device or medical condition on behalf of the company. The company typically pays an honorarium to the HCP speaker and often pays compensation, such as free meals, to attendees.

The OIG said the alert was not intended to discourage “meaningful training and education of medical professionals.” But drug and device makers must consider all risks when “evaluating whether to offer, pay for, solicit, or receive compensation from speaker programs.”

Tips for setting up effective programs

So, given these recent actions, what can you do about programs involving health care providers?

The devil is in the details. Here’s a starting point, but be sure to work with an experienced attorney to structure a potential program and draft documents and agreements consistent with program objectives.

  • Make sure that any payment to a healthcare professional is linked to a valid reimbursement or expense, or offers fair market value for the service provided. For example, if a doctor speaks at an event, it is possible to pay for travel costs and time spent preparing for the presentation.
  • Avoid lavish spending on food and drink.
  • Make sure any relationship with a doctor has a documented and legitimate business purpose.
  • Host educational events at a location like a conference center or hotel, rather than resorts or entertainment or sports venues.
  • Incorporate new medical or scientific information about the drug or product into any educational event.
  • Focus your speakers and guests on people with legitimate reasons to attend the program and discourage the attendance of friends, significant others, or family members of the speaker or HCP participant.
  • Although pharmaceutical and device manufacturers may know who is ordering their products, you may want to establish a “firewall” so that the information does not influence speaking decisions.
  • Remember that while it may be appropriate to provide information and support regarding your product to ensure its proper use, you must not provide free or discounted items or services unrelated to your product or which are usually provided by a medical practice as part of its day-to-day operations. For example, the OIG has previously warned that labs placing phlebotomists in doctor’s offices could violate anti-bribery law.

Ultimately, remember that if you provide anything with substantial independent value to a referral source, it may be considered a bribe, and the higher the value, the greater the scrutiny. that you may face is important. Items or services of minimal value, or that relate to your product and may enhance patient care are generally permitted. But also keep in mind that determining whether a particular arrangement violates anti-bribery law depends on an assessment of factors too numerous to list in this article.


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