Special Fraud Alert: Speaker Programs – If It's Too Good to Be True, It Probably Is

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On November 16, the Department of Health and Human Services Office of Inspector General (OIG) took a shot across the bow of the healthcare industry when it published a Special Fraud Alert highlighting some of the fraud and abuse risks inherent to speaker programs held and organized by pharmaceutical and medical device companies. The alert indicates that, in the last three years alone, Open Payments data shows physicians and other healthcare professionals (collectively, HCP) were paid nearly $2 billion for speaker-related services by drug and device companies, an amount that has without a doubt put speaker programs high on OIG’s radar. The alert states that OIG has become increasingly skeptical about the educational value and intent of speaker programs when there are other ways for HCPs to obtain information about products and diseases that do not involve remuneration, such as online resources, package inserts, third-party educational conferences, and journals.

While the alert is focused on the conduct and liability of the “bigger fish” – the drug and device companies holding and organizing such speaker programs – it is important to keep in mind that the Anti-Kickback Statute (AKS) likewise holds HCPs, including prescribers, accountable for receiving any remuneration in connection with what is determined to be a “sham” speaker program intended to induce orders or referrals, whether in the capacity of an attendee or a speaker. Indeed, the AKS is a two-way street, and it is a criminal offense for an HCP to knowingly and willfully receive remuneration intended to induce or reward referrals or orders for items or services reimbursed by a Federal Health Care Program. Further, in addition to drug and device manufacturers, other industry stakeholders that engage HCPs for such speaking engagements such as specialty pharmacies and GPOs should heed the warning of the alert as well.

Recent Enforcement Related to Speaker Programs

Recent enforcement actions regarding HCPs involvement in sham speaker programs have gained traction in 2020 and put into context the application of OIG’s recent alert. Earlier this year, a New York provider was sentenced in his capacity for conspiring to violate the AKS in connection with a scheme to prescribe the now-infamous Subsys in exchange for bribes and kickbacks in the form of speaker program fees from Subsys’ manufacturer, Insys Therapeutics. The provider, who had never prescribed Subsys before entering into the speaker program arrangement with Insys Therapeutics, became one of Insys Therapeutics’ highest-prescribing providers nationally, receiving approximately $143,000 in purported speaking fees in just one quarter – a little over 10% of the $1,132,287 in net sales he generated for Insys Therapeutics during the same time frame. Other similar cases involved with Insys Therapeutics’ “speaker bureau” have since followed suit.

While the case involving Insys Therapeutics may be an instance of egregious behavior, the alert suggests that OIG may be keen on more opportunities to hold drug and device manufacturers, as well as HCPs, accountable for their participation in speaker programs soon. Open Payments data in particular holds the potential to be a fruitful resource for OIG investigators looking to identify a company’s highest-paid providers. If OIG finds any indications that payments are tied to the value or volume of referrals, for instance, further investigation will likely follow suit – both into the company and the HCP.

Takeaways for Compliant Speaker Programs

To protect themselves, HCPs should accept invitations to present or attend speaker programs with a skeptical view akin to that which the OIG has seemingly adopted for scrutinizing the conduct of drug and device manufacturers, including pharmacies. HCPs should be alert to speaker program invitations that are reminiscent of OIG’s list of “suspect” speaker program characteristics to minimize their liability. Drug and device manufacturers should in turn keep this list in mind when structuring and organizing speaker programs, or when entering into such speaker program arrangements with prescribers. Without limitations, drug and device manufacturers, specialty pharmacies, HCPs, and other actors in the healthcare eco-system should be mindful of:

  • Organizing, or being invited to, the same or substantially same program despite a lack of any new medical or scientific information.
  • Educational events with the option to invite non-HCPs such as staff, friends, or significant others that have no legitimate business reason for attending such events.
  • Events at venues not conducive to educational sessions, such as busy restaurants, sports, and entertainment events.
  • Higher than fair market value speaking fees that take into account the volume or value of business generated or potential future business generated by the HCP.

In sum, viewing the OIG’s Special Fraud Alert as an indication of OIG’s renewed focus on sham speaker programs, the healthcare industry should carefully assess financial relationships between manufacturers and HCPs, and be wary of anything that could be perceived as “lavish” or “extravagant” in connection to speaker programs.  If the offer is too good to be true, it probably is.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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