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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.

El Contrato Escrito: La Herramienta Predilecta

No existe mejor herramienta a una disputa contractual que un documento firmado por las partes en el cual se expongan las obligaciones y acuerdos entre éstas.

New State Budget Institutes Licensure Requirement for Ohio’s Hospitals

On July 1, 2021, Governor Mike DeWine signed Ohio’s final budget codified at Ohio Revised Code 3722.01 et seq., which includes a new licensing requirement for Ohio’s hospitals. For years, Ohio was the only state in the country that did not license its hospitals. This approach will now be replaced with new, detailed requirements that will require careful review and compliance. Here are some of the highlights concerning these new changes:

Healthcare Provisions in the Ohio FY 22-23 Budget

Governor Mike DeWine signed Ohio’s Fiscal Year 2022-2023 budget bill (HB 110) into law on July 1, 2021. At almost 1,000 pages and 74.1 billion dollars, the budget lays out the State’s spending for the next two years. Below are a few highlighted provisions from the budget that will be important for the healthcare industry in Ohio

Interim Final Rule for Surprise Billing

In an effort to implement the new bipartisan No Surprises Act, on July 1, 2021, the Department of Health and Human Services (HHS), along with the Departments of Labor and Treasury, issued an interim final rule to safeguard patients against unforeseen medical bills arising from out-of-network care.

President Biden Seeks to Limit Non-Compete Agreements

Today, President Biden announced he would issue an Executive Order that calls on the Federal Trade Commission (FTC) to adopt rules to curtail worker non-compete agreements. Interestingly, a week ago, the FTC approved changes to its Rules of Practice to modernize and expedite the way it issues Trade Regulation Rules. If you have followed our alerts, we predicted the elimination of non-competes would probably happen. In 2016, then-Vice President Biden was a vocal opponent against non-compete agreements. He led the Obama administration’s initiative seeking to limit or eliminate non-compete agreements. In his presidential campaign, Biden promised to “work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets . . ..”