Physician Speaking Programs in the Crosshairs in OIG’s Special Fraud Alert

• November 20, 2020

• Bartt B. Warner , VMG Health

The Department of Health and Human Services Office of Inspector General (OIG) released a Special Fraud Alert on November 16, 2020 related to the inherent fraud and abuse risk associated with physicians or other health care professionals (HCPs) being offered, solicited, and/or receiving remuneration associated with speaking arrangements on behalf of pharmaceutical and medical device companies.[1] The alert specifically addresses speaking programs where HCPs present or speak about a device, disease state, or a drug and are paid an honorarium or other remuneration by the company. In addition, it focuses on the increased scrutiny associated with these arrangements and how they could potentially violate the Anti-Kickback Statute. Of note, this type of Special Fraud Alert is rare as the last one was issued over six years ago and tackled laboratory payments to referring physicians.[2]

Background

According to the Centers for Medicare & Medicaid Services (CMS), device and drug companies reported paying almost $2 billion to various HCPs in conjunction with speaker-related services.[3] In addition, the alert acknowledges that both the OIG and the Department of Justice (DOJ) have investigated and pursued civil and criminal cases against companies and HCPS with relation to speaker programs. Specifically, the alert cites various alleged cases including:

• selected high-prescribing HCPs to be speakers and rewarded them with lucrative speaker deals (e.g., some HCPs received hundreds of thousands of dollars for speaking);
• conditioned speaker remuneration on sales targets (e.g., required speaker HCPs to write a minimum number of prescriptions in order to receive the speaker honoraria);
• held speaker programs at entertainment venues or during recreational events or otherwise in a manner not conducive to an educational presentation (e.g., wineries, sports stadiums, fishing trips, golf clubs, and adult entertainment facilities);
• held programs at high-end restaurants where expensive meals and alcohol were served (e.g., in one case, the average food and alcohol cost per attendee was over $500); and
• invited an audience of HCP attendees who had previously attended the same program or HCPs’ friends, significant others, or family members who did not have a legitimate business reason to attend the program.[4]

In addition, the alert notes that numerous investigations surrounded allegations related to the “intent” of device or drug companies to induce HCPs to prescribe, order, or recommend the prescription of the companies’ products as a result of the speaker programs. Although, the company sponsored speaker programs may be intended to help educate and inform other HCPs about the benefits, risks, and, uses of the devices and drugs, the OIG makes clear that it is skeptical about the educational values of such programs. Specifically, the alert states,

Our investigations have revealed that, often, HCPs receive generous compensation to speak at programs offered under circumstances that are not conducive to learning or to speak to audience members who have no legitimate reason to attend. Such cases strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals. Furthermore, studies have shown that HCPs who receive remuneration from a company are more likely to prescribe or order that company’s products.[5] This remuneration to HCPs may skew their clinical decision making in favor of their own and the company’s financial interests, rather than the patient’s best interests.[6]

Fraud and Abuse Risks

The Special Fraud Alert brings to attention that information provided via the company sponsored speaker arrangements may be obtained through various sources that do not require remuneration to an HCP. For example, the information could potentially be acquired online, with the product’s package insert, or in medical journals and third-party educational conferences. As the information may be readily available for the devices and drugs, the OIG suggests that at least one purpose of the remuneration for the company sponsored speaker programs is to induce or reward referrals. As a result, the OIG will hold the parties involved in speaker programs to an increased level of scrutiny. This sentiment is consistent with the OIG’s historical concerns related to device and drug companies providing anything of value to HCPs who can influence referrals of those companies’ products. This also includes a warning for HCPs acting as consultants or speakers on behalf of the company and the intent of the remuneration is not necessary for providing the best treatment for the patient.

Suspect Characteristics

Although the OIG makes it clear that the lawfulness of HCP speaker arrangement depends on the specific facts and circumstances, including the intent of the parties, there are various suspect characteristics that are detailed below:

• The company sponsors speaker programs where little or no substantive information is actually presented;
• Alcohol is available or a meal exceeding modest value is provided to the attendees of the program (the concern is heightened when the alcohol is free);
• The program is held at a location that is not conducive to the exchange of educational information (e.g., restaurants or entertainment or sports venues);
• The company sponsors a large number of programs on the same or substantially the same topic or product, especially in situations involving no recent substantive change in relevant information;
• There has been a significant period of time with no new medical or scientific information nor a new FDA-approved or cleared indication for the product;
• HCPs attend programs on the same or substantially the same topics more than once (as either a repeat attendee or as an attendee after being a speaker on the same or substantially the same topic);
• Attendees include individuals who don’t have a legitimate business reason to attend the program, including, for example, friends, significant others, or family members of the speaker or HCP attendee; employees or medical professionals who are members of the speaker’s own medical practice; staff of facilities for which the speaker is a medical director; and other individuals with no use for the information;
• The company’s sales or marketing business units influence the selection of speakers or the company selects HCP speakers or attendees based on past or expected revenue that the speakers or attendees have or will generate by prescribing or ordering the company’s product(s) (e.g., a return on investment analysis is considered in identifying participants);
• The company pays HCP speakers more than fair market value for the speaking service or pays compensation that takes into account the volume or value of past business generated or potential future business generated by the HCPs.[7]

Recommendation

The alert identifies multiple recommendations for HCP speaker arrangements on behalf of the device and drug companies due to the high-level of scrutiny involved and potential violations of the Anti-Kickback Statute. Highlighted below are the recommendations identified by the OIG:

• HCPs should consider the propriety of any relationship with a device or drug company and determine if the basis for the remuneration provided is for the HCP’s ability to prescribe a drug, utilize a medical device, or provide a referral. If the answer is yes, then the arrangement should be avoided as it could potentially violate the various fraud and abuse laws.
• Although many in-person activities have decreased due to the pandemic emergency, the risk associated with company sponsored HCP speaking programs may face even greater scrutiny if they are resumed or increase speaker program-related remuneration to HCPs.
• Companies should analyze the need for HCP speaker programs if remuneration is provided and look for lower risk alternatives for disseminating the information.

Conclusion

Although the Special Fraud Alert indicates that it is not intended to discourage HCP training that is deemed meaningful and educational, serious risk may be involved when remuneration is paid to HCPs for such training. The OIG makes clear that company sponsored HCP speaker programs can be risky if not properly structured, monitored, and have fraudulent intentions. Lastly, companies will be under intensified scrutiny if these programs were reduced during the pandemic emergency and are later resumed and/or if HCP remuneration is increased. As a result, device and drug companies should evaluate their speaker programs utilizing the guidance provided by the Special Fraud Alert. This should include setting specific guidelines and guardrails, determining the justification for the arrangement, analyzing how speakers are selected and paid, and determining if the remuneration paid to the HCPs is set at fair market value.

Bartt B. Warner, CVA is a Director with VMG Health and is based out of VMG Health’s Nashville office. Mr. Warner can be reached at (615) 577-4206 or by e-mail at [email protected].

ARTICLE TAGS

• Hospitals and Health Systems Practice Group
• Fraud and Compliance