​On November 16, 2020, the Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“HHS”), issued a Special Fraud Alert highlighting the Anti-Kickback Statute (“AKS”) risks for pharmaceutical and medical device companies providing remuneration for speaker programs they sponsor.

In addition to being important to industry, this Special Fraud Alert should be of interest to physicians, community hospitals and academic medical centers who engage with pharmaceutical and medical device companies.  

The AKS imposes criminal penalties for those who knowingly and willfully solicit, receive, offer, or pay any remuneration to induce or reward, among other things, referrals for, or orders of, items or services reimbursable under Medicare, Medicaid, and other federal health care programs. The term “remuneration” includes the transfer of anything of value, in cash or in kind, directly or indirectly, covertly or overtly. Given the breadth of the AKS’ plain language if read literally, the OIG has clarified that certain arrangements are not within the AKS’ prohibition by adopting “safe harbor” regulations that protect some activities and business relationships from prosecution.  

The Special Fraud Alert identifies a series of “red flags” from cases that the U.S. Department of Justice (“DOJ”) has already prosecuted, and, notably, is highly critical of “drug and device companies [that] organize and pay for speaker programs with the intent to induce [health care professionals (“HCPs”)] to prescribe or order (or recommend the prescription or ordering of) the companies’ products.” The OIG does not seek to discourage “meaningful HCP training and education.”  The facts and circumstances of each engagement will determine the sufficiency of evidence to prove any knowing and willful misconduct violative of the AKS.

The Special Fraud Alert provides an illustrative list of indicia of “bad” intent, including the following:
Alcohol is available or a meal exceeding modest value is provided to program attendees;

• The program is held at a location 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 U.S. Food and Drug Administration-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 do not 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); and
• 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.

In the Special Fraud Alert, the OIG explicitly notes that, “[p]arties involved in speaker programs may be subject to increased scrutiny,” including “any drug or device company that organizes or pays remuneration associated with the program, any HCP who is paid to speak, and any HCP attendees who receive remuneration from the company” – including free food and drink.

The Special Fraud Alert is an important reminder of the fraud and abuse risks associated with speaker programs and the OIG’s scrutiny of such arrangements.