Why You Shouldn’t Kickback and Relax at Your Next Speaker Program
A Recent OIG Alert Highlights the Risk of Anti-Kickback Statute Violation at Speaking Events
On November 16, 2020, the Office of Inspector General (OIG) issued a Special Fraud Alert emphasizing the risks of fraud and abuse regarding “the offer, payment, solicitation or receipt of remuneration” in connection with speaker programs sponsored by pharmaceutical and medical device companies. Between 2017 and 2019, drug and device companies paid nearly $2 billion to health care professionals (HCPs) for speaker-related services. Drug and device company-sponsored speaker programs normally entail a HCP who is unaffiliated with the company addressing colleagues regarding a product or disease via a company-approved presentation. OIG investigations have revealed that speakers at these programs often receive lavish payment. Furthermore, attendee HCPs have been found to receive benefits unrelated to any educational value where the speaker programs were held at entertainment venues, recreational events or high-end restaurants where expensive meals and alcohol were served.
The OIG says the above arrangements “strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals” and that “studies have shown that HCPs who receive remuneration from a company are more likely to prescribe or order that company’s products.” The result, according to the OIG, is the potential implication of the anti-kickback statute (found at 42 United State Code 1320a-7b(b)). The purpose of the anti-kickback statute, in part, is to protect patients from referral or recommendations by HCPs who may have been improperly influence. Under the anti-kickback statute, it is a crime to “knowingly and willfully solicit, receive, offer or pay any renumeration to induce or reward, among other things, referrals for, or orders of, items or services reimbursable by a federal health care program.” This may encompass exchanging anything valuable. Those who are criminally convicted of soliciting, receiving or offering to pay a prohibited remuneration will be excluded from federal health care programs (including Medicare and Medicaid) and may face a fine of up to $100,000, up to 10 years in prison or both. Civil money penalties and administrative proceedings to exclude persons from federal health care programs are also possible.
The OIG identifies the following characteristics, taken either separately or collectively, as potentially illustrative of a speaker arrangement in violation of the anti-kickback statute:
- Scant substantive information is conveyed.
- Attendees receive an expensive meal and have access to alcohol.
- Venue is not appropriately conducive to an educational setting.
- A large number of programs are sponsored by the company covering essentially the same information, especially when no substantive changes in that information have occurred.
- No new information has been available for a substantial period of time.
- HCPs attend multiple programs several times on the same topic.
- Individuals lacking a business reason for attending the program, such as family, attend the program.
- Speakers and/or attendees are chosen on the basis of past or future revenue garnered by the company.
- Payment to the speaker is greater than fair market value or renumeration involves past business or projected business generated.
The OIG realizes that a speaker program’s lawfulness is dependent upon facts, circumstances and parties’ intent. However, if the requisite intent is to persuade HCPs to order or prescribe items paid for by federal health care programs, HCPs and companies could face criminal, civil and administrative enforcement action for violation of the anti-kickback statute. Based on the concern that the clinical decision making of HCPs may be adversely affected by remuneration, the OIG suggests HCPs obtain information about drug and device products and disease states “using various online resources, the product’s package insert, third-party educational conferences, medical journals,” and other ways that do not involve remuneration to HCPs.
Should you have any questions concerning speaking opportunities or the anti-kickback statute, please contact Ms. Rubin.
Anna L. Schroeder, a law clerk with Eastman & Smith who received her law degree from The Ohio State University Moritz College of Law, contributed to this article.
Disclaimer: The article in this publication has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.