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Healthcare Speaker Programs: New OIG Alert

In a rare Special Fraud Alert issued on November 16, 2020 (the “Alert”), the Office of Inspector General (“OIG”) urged companies who host speaker programs to reassess their programs in light of the “inherent risks” associated with these activities. The Alert reports that, in the last three years, drug and device companies have reported paying nearly $2 billion to health care professionals for speaker-related services.

For the purpose of the Alert, speaker programs are defined as “company-sponsored events at which a physician or other health care professional (collectively, “HCP”) makes a speech or presentation to other HCPs about a drug or device product or a disease state on behalf of the company.” The company will typically pay the speaker an honorarium, and often provides some sort of incentive (for example, free meals) to encourage attendance. While honorariums are not illegal per se, because much of the information presented in these programs is available elsewhere, the OIG warns that often, “at least one purpose of remuneration associated with speaker programs is often to induce or reward referrals,” which is in violation of the federal Anti-Kickback Statute (“AKS”).

The AKS is an intent-based statute, so an analysis of a speaker program will depend on the facts and circumstances surrounding the program. The Alert provides a helpful list of suspect characteristics that, if present in a speaker program arrangement, could indicate that the speaker program violates the AKS. These characteristics include:

  • No Substantive Content. Programs where there is little or no substantive information actually presented at the program.
  • Expensive Food, Alcohol Available. Programs that offer alcohol (risk heightened if alcohol is free) or a meal exceeding “modest value” to program attendees.
  • Venue. Programs held in locations that are not conducive to the exchange of educational information (e.g. restaurants, entertainment, and sports venues).
  • Number of Programs. A company sponsors a large number of programs on the same or similar topic or product, especially if there have been no recent substantive changes in relevant information.
  • Program Does Not Follow New Product or Indication. Programs conducted where there has been a “significant period of time” with no new medical or scientific information published about the product nor new-FDA approval of the product to discuss.
  • Repeat Attendance. Programs where the attendees have attended other programs on the same or substantially the same topics more than once (as a repeat attendee or as an attendee after serving as a speaker for the same topic).
  • Attendance by Friends, Family, and Staff. Program attendees or invitees include individuals who do not have a legitimate business reason to attend the program. For example: friends, significant others, and family members of the speaker or HCP attendees; HCP practice employees and other staff; and “other individuals with no use for the information.”
  • Sales Involvement. Programs in which sales representatives or marketing personnel are involved in the selection of speakers, or the company selects HCP speakers or attendees based on past or potential revenue generated by orders of the company’s products (e.g., a return on investment analysis).
  • Payment Exceeds FMV. Payment to HCP speakers exceeds fair market value for the speaking service, or compensation considers the volume or value of business generated by the HCPs for the company.

Speaking programs with one or more of the above characteristics will be considered suspicious by the OIG and subject to further scrutiny. As a result of an investigation into a speaking program, if the OIG finds that requisite intent is present, both the company and the HCPs may be subject to criminal, civil, and administrative enforcement actions.

This Alert was published now to encourage drug and device companies and HCPs to reassess their speaker programs as in-person speaking programs start to resume. The OIG advises companies to scrutinize the need for in-person programs given the risks associated with offering or paying related remuneration and consider alternative, less-risky, means for conveying information to HCPs. HCPs should also evaluate the risks of soliciting or receiving remuneration related to speaker programs given other available means to gather information relevant to providing appropriate treatment for patients.

Please contact BMD Healthcare and Hospital Law Member Jeana Singleton at jmsingleton@bmdllc.com or Attorney Ashley Watson at abwatson@bmdllc.com if you have any questions regarding health care fraud and abuse guidelines and how to ensure your practice can remain compliant.

BMD Appellate Win Clarifies Waiver of Contractual Right to Arbitrate

Brennan, Manna & Diamond, LLC attorneys David M. Scott, Lucas K. Palmer, and Krista D. Warren prevailed before the United States Court of Appeals for the Sixth Circuit regarding if/when a party waives a contractual right to arbitrate. Borror Property Management, LLC v. Oro Karric North, LLC, No. 20-3146 (the “Decision”).

Relief for Ohio Under the Federal American Rescue Plan Act

On March 11, 2021, President Biden signed the American Rescue Plan Act (the “Act”) — a $1.9 trillion COVID-19 relief package — a significant portion of which will be directed to the State of Ohio to support economic recovery, as outlined below.

Cleveland Manufacturer Violated OFAC Sanctions By Allowing Shipments To Iran - Know Your Customer and Know Their Customer

UniControl, Inc., a Cleveland, Ohio manufacturer of process controls, airflow pressure switches, boiler controls and other instruments, agreed to pay the Office of Foreign Assets Control “OFAC,” the financial enforcement agency of the U.S. Treasury Department, $216,464 to settle its liabilities for violations of the Iran Sanctions Program. OFAC stated that “this enforcement action highlights the importance of identifying and assessing multiple warning signs that indicate a foreign trade partner may be re-exporting goods to a sanctioned jurisdiction.”

Ohio Breach of Contract Statute of Limitations Shortened to 6 Years

On March 16, 2021, Governor DeWine signed into law S.B. 13 which shortens Ohio’s statute of limitations for filing lawsuits based on breach of contract. A statute of limitation is the time period within which a party must file a lawsuit before its claim expires as a matter of law.

Chinese Product Tariff Challenge Causes Flurry of Importer Lawsuits

A lawsuit filed late in 2020 at the U.S. Court of International Trade (“CIT”) challenging the U.S. Trade Representative’s (USTR) implementation of Section 301 “List 3” and “List 4” duties on products from China, HMTX Industries LLC et al. v. United States (Court No. 20-00177), has resulted in the filing of thousands of additional lawsuits brought by other affected importers. There are now 3,700+ companies added to the list, including Ford, Home Depot, Target, Tesla, and Walgreens, along with many other smaller importers.