The OIG Says There is No Such Thing as a Free Meal

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On November 16, 2020, the Office of the Inspector General of the Department of Health Human Services issued a Special Fraud Alert: Speaker Programs (“Alert”), highlighting the fraud and abuse risks associated with speaker programs sponsored by pharmaceutical and medical device companies.1  To use its own word, the OIG is “skeptical” of the value of many speaker programs, which it believes may violate the Anti-Kickback Statute (AKS) by paying “substantial remuneration” to health care providers (HCPs) that are designed to encourage the HCPs to prescribe or use the sponsoring-company’s products, not because the products may benefit specific patients, but rather merely because they are paid.

The AKS makes it a criminal offense to knowingly and willfully solicit, receive, offer or pay any remuneration to induce the referrals for, or orders of, items or services reimbursable by a federal health care program.  Remuneration includes the transfer of anything of value, directly or indirectly, in cash or in kind.  Criminal liability is ascribed to all parties who participate in an impermissible kickback activity.

The OIG refers to “speaker programs” as company-sponsored programs during which an HCP presents to other HCPs about a drug, a medical device, or a disease state on behalf of the company.  The speaker is paid an honorarium, and the attendees are offered free meals to participate.  The OIG notes that it has learned of cases where the programs are held in locations not conducive to learning, such as entertainment venues, wineries, and even adult entertainment facilities, or where the attendees have no real reason to attend—except for the free food, often inviting friends and family members to the events.

The OIG cited to studies concluding that doctors who speak on behalf of the company are more likely to prescribe or order the company’s products.  This evidence, according to the OIG, raises the concern that “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.”

The OIG noted there are many other ways HCPs can obtain information about particular drug and device products and disease states that do not involve remuneration to HCPs, such as reviewing online resources, medical journals, the product’s package insert, and attending medical conferences.  Because these resources are available without paying a doctor to speak, the OIG views that this “further suggests that at least one purpose of remuneration associated with speaker programs is often to induce or reward referrals.”

Although warning HCPs that they could face liability under the AKS for receiving payments in exchange for prescribing or referring products that are reimbursable by the federal government, the OIG did not suggest the imposition of a blanket prohibition on speaker programs, stating that an AKS review will be fact-specific and dependent on the parties’ intent.  However, the OIG issued the Alert “to highlight certain inherent risks of remuneration relat[ing] to speaker programs.”  Arrangements that would likely raise scrutiny include, but are not limited to:

  • Programs during which the speaker offers little or no substantive information;
  • The meals are not of modest value and alcohol is served, particularly if free;
  • The program location is not conducive to a discussion or exchange of information (e.g., restaurants or entertainment or sports venues);
  • There are numerous programs scheduled on the same or similar topic or product despite no recent substantive changes in relevant information;
  • HCPs are attending programs on the same or similar topic such that the information is not “new”;
  • Those attending do not have a legitimate reason to attend (e.g., spouses) and will not benefit from the information;
  • The selection of the speakers is driven by the company’s sales or marketing groups based on prescribing habits;
  • The selection of the speakers is driven by the company’s sales or marketing groups based on prescribing habits;

The risks identified in the Alert should come as no surprise to the industry.  The examples highlighted by the OIG of potentially violative programs are consistent with past enforcement actions, as well as those highlighted by the PhRMA Code on Interactions with Health Care Professionals.  That said, the issuance of the Alert sends a clear message that the OIG is skeptical of speaker programs and while not per se unlawful, companies must be aware that the government is keeping a critical eye on them and will not hesitate to investigate these programs.  Companies should, therefore, review their policies on speaker programs with the Alert’s cautionary notes in mind, pay attention to speaker agreement contracts, and audit and monitor programs to ensure that all are following company policies.

[1] U.S. Department of Health and Human Services Office of the Inspector General, Special Fraud Alert: Speaker Programs (Nov. 16, 2020), available at https://oig.hhs.gov/fraud/docs/alertsandbulletins/2020/SpecialFraudAlertSpeakerPrograms.pdf.

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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