OIG Skeptical of Paid Speaker Programs; Issues Special Fraud Alert
By Nicolette Taber and Ann Ford
Recently, the Office of Inspector General (OIG) at the U.S. Department of Health and Human Services (HHS) issued a rare Special Fraud Alert pertaining to medical device and pharmaceutical speaker programs. The OIG defines speaker programs as “company-sponsored events at which a physician or other health care professional makes a speech or presentation to other health care professionals about a drug or device product or a disease state on behalf of the company.” The sponsoring company typically pays the speakers an honorarium.
The OIG is actively pursuing civil and criminal cases against companies for sponsoring speaker events that violate the Anti-Kickback Statute (“AKS”). The OIG warned many speaker programs violate the AKS because the events are designed with the intent to induce referrals. The AKS is a criminal statute which bars the knowing and willful solicitation, receipt, offer, or payment of any remuneration to induce or reward items or services reimbursable by a Federal health care program. If the OIG declines to pursue criminal charges under the AKS, it can also choose to pursue administrative proceedings to exclude individuals from the Federal health care programs and impose civil monetary penalties against medical device and pharmaceutical companies for prohibited conduct.
Some examples of recent cases the OIG alleged against drug and device companies include: paying health care professionals hundreds of thousands of dollars for speaking, conditioning speaker remuneration on sales targets, holding speaker programs at entertainment venues not conducive to an educational presentation (e.g., wineries, sports stadium, golf clubs), and spending an exorbitant amount on food and beverages ($500 per attendee).
While bona fide speaker programs are still permitted as educational tools for medical device companies and health care professionals, the OIG made it very clear that it will not tolerate unlawful inducements disguised as education. Medical device companies and other life sciences companies must continue to compensate speakers consistent with fair market value and ensure its programs are not designed with the specific intent to induce orders of the companies’ products.
OIG compiled a non-exhaustive list of suspect characteristics of speaker programs:
Little or no substantive information is actually presented
Alcohol is available (free alcohol heightens concerns) or exorbitant meals are provided to the attendees of the program
Program is held at a location that is not conducive to the exchange of educational information (e.g., restaurants or entertainment or sports venues)
The company sponsors a large number of programs concerning the same or very similar topic or product
There has been a significant period of time with no new medical or scientific information nor an FDA-approved need for the product
Health care providers attend programs on the same or substantially similar topics more than once
Attendees include individuals who do not have a legitimate business reason to attend the program (e.g., friends or family members, medical professionals outside of the speaker’s own medical practice)
The company prioritizes a return on investment in analyzing the selection of speakers/attendees
The company pays the speakers more than fair market value or takes into consideration the volume or value of past/future business generated by the speakers
The OIG recognizes this special fraud alert was released during the COVID-19 pandemic where plans for many in-person speaker events are currently halted. The OIG emphasized that risk remains present, however, whenever payments are offered or made to health care professionals in order to induce Federal health care program business for the company. When considering restarting the speaker programs, the OIG cautions medical device and pharmaceutical companies to assess the prevalent risks involved with in-person speaking events. In close, the OIG emphasized its availability as a resource on these matters via the OIG Advisory Opinion process.
Do you have questions about the OIG Fraud Alert? Please contact Ann Ford (aford@hpslaw.com) and Nicolette Taber (ntaber@hpslaw.com).
