Government fraud alert for physicians: Watch out for speaker programs

November 18, 2020
Conor Duffy
Conor Duffy

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Nathaniel T. Arden
Nathaniel T. Arden

Past Special Fraud Alerts have portended heightened enforcement activity.

On November 16, 2020, the Office of Inspector General of the Department of Health & Human Services (OIG) issued a Special Fraud Alert (Alert) highlighting the fraud and abuse risks posed by speaker programs sponsored by pharmaceutical and medical device companies. The Alert appears to be a clear signal to health care professionals, as well as pharmaceutical and medical device companies, that the OIG will closely scrutinize remuneration exchanged or offered as part of a speaker program under the Anti-Kickback Statute (AKS) and pursue sanctions against all parties to impermissible arrangements thereunder.

In the Alert, the OIG uses the term “speaker program” to refer generally to “company-sponsored events” at which health care professionals make a presentation regarding a company drug or device product or disease state on behalf of the company, in exchange for an honorarium and additional remuneration to the speaker and attendees of the presentation in the form of meals, entertainment and/or other gifts. The OIG notes that the government has pursued a number of AKS cases – criminal and civil – that involve allegations that remuneration paid in connection with a speaker program violated the AKS, and that during 2017-2019, drug and device companies reported paying almost $2 billion to health care professionals “for speaker-related services.” The Alert highlights allegations in AKS speaker-program cases, including (i) the selection and rewarding of high-prescribing providers with lucrative speaking arrangements, (ii) tying speaker payments to achieving sales (prescribing) targets, and (iii) holding speaker programs at sports and other recreational events, or high-end restaurants, not conducive to a bona fide educational setting.

The OIG openly expresses its skepticism about “the educational value of such programs” in the Alert and notes that the same educational information about a company’s products can be obtained by means other than speaker programs (e.g., online resources, journal articles or product inserts). According to the OIG, because much of the information is available without providing remuneration to health care professionals it suggests that at least one purpose of many speaker programs is to induce or reward referrals in violation of the AKS.

The OIG cites a recent study indicating that providers who receive remuneration from a company are more likely to prescribe or order the company’s products, which suggests that such remuneration may skew clinical decision making and be subject to OIG scrutiny. The OIG reiterates its longstanding AKS concerns regarding the provision of anything of value to health care professionals by drug or device companies, and states that all parties involved in speaker programs “may be subject to increased scrutiny.”

The OIG then provides non-exclusive examples of suspect characteristics of speaker programs under the AKS, including:

  • Speaker programs where little or no educational information is actually presented;
  • Alcohol and/or expensive meals are made available to attendees (with heightened concern if the alcohol is free);
  • Programs held at restaurants, sporting events, or other settings not conducive to the exchange of educational information;
  • Speaker programs featuring presentations on products for which there is no new FDA approval or other new medical or scientific information;
  • Speaker programs featuring repeat attendees, or with the same or similar topic, particularly where there have been no recent substantive changes to the information known about the topic or product;
  • Speaker programs with attendees with no legitimate business reason to attend (including the presenter’s office staff, family or friends);
  • Speaker programs over which the sponsoring company’s sales or marketing staff have influence on the selection of speakers; and
  • Payments to providers in excess of fair market value for speaking, or payments that take into account volume or value of business generated by the speaking provider.

The OIG concedes that the lawfulness of any arrangement involving a speaker program will depend upon the particular facts and circumstances, but concludes by emphasizing its “significant concerns about companies offering or paying remuneration (and [health care professionals] soliciting or receiving remuneration) in connection with speaker programs.” The OIG notes that where the requisite intent to induce or reward referrals in violation of the AKS is present, both the company (including its employees) and speaking providers may be subject to criminal, civil, and administrative enforcement actions, and therefore, drug and device companies – and health care professionals – “should consider the risks” associated with compensatory speaker programs. The OIG advises companies to assess the need for resumption of in-person speaker programs following the pandemic, and cautions health care professionals to “consider the risks of soliciting or receiving remuneration related to speaker programs” under the circumstances.

The OIG’s warning to drug and device companies – and health care professionals – regarding the risks of speaker programs in the Alert is stark. Past Special Fraud Alerts from the OIG have portended heightened enforcement activity targeting arrangements described in such Alerts. Health care professionals would therefore be well-advised to carefully consider all interactions with drug and device companies involving monetary payments or other transfers of value/benefits, and consult with counsel as needed in advance of entering into such arrangements with drug and device companies.

Conor Duffy and Nathaniel Arden are attorneys with Robinson & Cole LLP.