[Federal Register Volume 87, Number 162 (Tuesday, August 23, 2022)]
[Notices]
[Pages 51683-51687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18063]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of OIG Special Fraud Alerts
AGENCY: Office of Inspector General (OIG), HHS.
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ACTION: Notice.
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SUMMARY: This Federal Register notice sets forth two Special Fraud
Alerts previously published by OIG on its website. We are publishing
these Special Fraud Alerts in the Federal Register to ensure widespread
dissemination of the Special Fraud Alerts to the general public and to
satisfy the Federal Register publication requirement.
FOR FURTHER INFORMATION CONTACT: Katie Fink, Karen Glassman, or
Benjamin Wallfisch, (202) 619-0335.
I. Background
Pursuant to 42 U.S.C. 1320a-7d(c), OIG periodically issues Special
Fraud Alerts to give continuing guidance to health care industry
stakeholders regarding practices OIG considers to be suspect or of
particular concern. Special Fraud Alerts encourage industry compliance
by giving stakeholders guidance that can be applied to their own
practices. In developing Special Fraud Alerts, OIG relies on several
sources and consults directly with experts in the subject field
including those within OIG, other HHS agencies, other Federal and State
agencies, and in the health care industry.
To ensure widespread dissemination of this information to the
general public and to satisfy the Federal Register publication
requirement found in 42 U.S.C. 1320a-7d(c)(1)(B), OIG is republishing
two Special Fraud Alerts--in their entirety--below. These Special Fraud
Alerts are: (1) Special Fraud Alert: Speaker Programs, which was
originally published on OIG's website on November 16, 2020; and (2)
Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When
Entering Into Arrangements With Purported Telemedicine Companies, which
was originally published on OIG's website on July 20, 2022.
II. Special Fraud Alert: Speaker Programs
I. Introduction
This Special Fraud Alert highlights the fraud and abuse risks
associated with the offer, payment, solicitation, or receipt of
remuneration relating to speaker programs by pharmaceutical and medical
device companies. For purposes of this Special Fraud Alert, speaker
programs are generally 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
generally pays the speaker HCP an honorarium, and often pays
remuneration (for example, free meals) to the attendees. In the last
three years, drug and device companies have reported paying nearly $2
billion to HCPs for speaker-related services.\1\
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\1\ Drug and device companies are required to report certain
payments made to HCPs to the Centers for Medicare & Medicaid
Services (CMS). CMS makes this information publicly available on its
Open Payments website. According to Open Payments, drug and device
companies paid HCPs nearly $2 billion under the category
``compensation for services other than consulting, including serving
as faculty or as a speaker at a venue other than a continuing
education program'' for years 2017, 2018, and 2019 combined. Open
Payments Complete 2017, 2018, and 2019 Program Year Datasets, CMS,
https://www.cms.gov/OpenPayments/Explore-the-Data/Data-Overview
(accessed Sept. 9, 2020).
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The Office of Inspector General (OIG) and Department of Justice
(DOJ) have investigated and resolved numerous fraud cases involving
allegations that remuneration offered and paid in connection with
speaker programs violated the anti-kickback statute. The Federal
government has pursued civil and criminal cases against companies and
individual HCPs involving speaker programs. These cases alleged, for
example, that drug and device companies:
selected high-prescribing HCPs to be speakers and rewarded
them with lucrative speaker deals (e.g., some HCPs received hundreds of
thousands of dollars for speaking); \2\
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\2\ Though not addressed in this Special Fraud Alert,
remuneration paid by drug and device companies relating to the
training of HCP speakers also may raise fraud and abuse risks.
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conditioned speaker remuneration on sales targets (e.g.,
required speaker HCPs to write a minimum number of prescriptions in
order to receive the speaker honoraria);
held speaker programs at entertainment venues or during
recreational events or otherwise in a manner not conducive to an
educational presentation (e.g., wineries, sports stadiums, fishing
trips, golf clubs, and adult entertainment facilities);
held programs at high-end restaurants where expensive
meals and alcohol were served (e.g., in one case, the average food and
alcohol cost per attendee was over $500); and
invited an audience of HCP attendees who had previously
attended the same program or HCPs' friends, significant others, or
family members who did not have a legitimate business reason to attend
the program.
Our enforcement experience demonstrates that some companies expend
significant resources on speaker programs and that some HCPs receive
substantial remuneration from companies. This Special Fraud Alert
highlights some of the inherent fraud and abuse risks associated with
the offer, payment, solicitation, or receipt of remuneration related to
company-sponsored speaker programs.
II. The Anti-Kickback Statute
Congress enacted the anti-kickback statute, in part, to protect
patients from referrals or recommendations by HCPs who may be
influenced by inappropriate financial incentives. The anti-kickback
statute makes it a criminal offense to knowingly and willfully solicit,
receive, offer, or pay any remuneration to induce or reward, among
other things, referrals for, or orders of, items or services
reimbursable by a Federal health care program.\3\ When remuneration is
paid purposefully to induce or reward referrals of items or services
payable by a Federal health care program, the anti-kickback statute is
violated. For purposes of the anti-kickback statute, the offer,
payment, solicitation, or receipt of ``remuneration'' includes the
transfer of anything of value, directly or indirectly, overtly or
covertly, in cash or in kind. By its terms, the statute ascribes
criminal liability to all parties to an impermissible ``kickback''
transaction (i.e., those who solicit or receive prohibited remuneration
as well as those who offer or pay the prohibited remuneration).
Violation of the statute is a felony punishable by a maximum fine of
$100,000, imprisonment up to 10 years, or both. Criminal conviction
will also lead to mandatory exclusion from Federal health care
programs, including Medicare and Medicaid.\4\ OIG may also initiate
administrative proceedings to exclude persons from the Federal health
care programs and impose civil money penalties for conduct prohibited
by the anti-kickback statute.\5\
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\3\ See section 1128B(b)(1)-(2) of the Social Security Act; 42
U.S.C. 1320a-7b(b)(1)-(2). The anti-kickback statute applies broadly
to remuneration to induce or reward referrals of patients as well as
the payment of remuneration intended to induce or reward the
purchasing, leasing, or ordering of, or arranging for or
recommending the purchasing, leasing, or ordering of, any item or
service reimbursable by any Federal health care program. In this
Special Fraud Alert, we use the term ``referral'' to include the
full range of these types of activities (including ordering or
prescribing items) that falls within the scope of the anti-kickback
statute.
\4\ See 42 U.S.C. 1320a-7(a).
\5\ See 42 U.S.C. 1320a-7(b)(7); 1320a-7a(a)(7).
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III. Fraud and Abuse Risks of Speaker Programs
Numerous investigations have involved allegations that drug and
device companies organize and pay for speaker programs with the intent
to
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induce HCPs to prescribe or order (or recommend the prescription or
ordering of) the companies' products. Speaker programs typically
involve an HCP who is not an employee of the company speaking in person
to other HCPs about a company product or disease state using a
presentation developed and approved by the company. According to a
pharmaceutical industry trade group, HCPs ``participate in company-
sponsored speaker programs in order to help educate and inform other
health care professionals about the benefits, risks, and appropriate
uses of company medicines.'' \6\
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\6\ Code on Interactions with Health Care Professionals, PhRMA,
7 (June 2020), available at https://phrma.org/Codes-and-guidelines/Code-on-Interactions-with-Health-Care-Professionals. A device
industry trade group also addresses this topic and interactions with
HCPs generally in its code of ethics. See AdvaMed Code of Ethics,
AdvaMed (July 2020), available at https://www.advamed.org/resource-center/advamed-code-ethics-2020.
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OIG is skeptical about the educational value of such programs. Our
investigations have revealed that, often, HCPs receive generous
compensation to speak at programs offered under circumstances that are
not conducive to learning or to speak to audience members who have no
legitimate reason to attend. Such cases strongly suggest that one
purpose of the remuneration to the HCP speaker and attendees is to
induce or reward referrals. Furthermore, studies have shown that HCPs
who receive remuneration from a company are more likely to prescribe or
order that company's products.\7\ This remuneration to 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.
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\7\ Amarnath Annapureddy et al., Association Between Industry
Payments to Physicians and Device Selection in ICD Implantation, 324
JAMA 17, 2020, at 1759, 1762-63; William Fleischman et al.,
Association between payments from manufacturers of pharmaceuticals
to physicians and regional prescribing: cross sectional ecological
study, 354 BMJ i4189, 2016, at 1, 4-7; James P. Orlowski & Leon
Wateska, The effects of pharmaceutical firm enticements on physician
prescribing patterns. There's no such thing as a free lunch., 102
Chest, 1992, 270.
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There are many other ways for HCPs to obtain information about drug
and device products and disease states that do not involve remuneration
to HCPs. HCPs can access the same or similar information provided in a
speaker program using various online resources, the product's package
insert, third-party educational conferences, medical journals, and
more. The availability of this information through means that do not
involve remuneration to HCPs further suggests that at least one purpose
of remuneration associated with speaker programs is often to induce or
reward referrals.
Parties involved in speaker programs may be subject to increased
scrutiny. These include any drug or device company that organizes or
pays remuneration associated with the program, any HCP who is paid to
speak, and any HCP attendees who receive remuneration from the company
(e.g., free food and drink). OIG has long expressed concerns over the
practice of drug and device companies providing anything of value to
HCPs in a position to make or influence referrals to such companies'
products. In the 2003 OIG Compliance Program Guidance for
Pharmaceutical Manufacturers,\8\ OIG identified manufacturer
compensation relationships with physicians connected directly or
indirectly to marketing and sales activities, including speaking
activities, as an area of potential risk under the anti-kickback
statute. OIG noted that when a drug or device company engages in
``entertainment, recreation, travel, meals or other benefits in
association with information or marketing presentations,'' such
arrangements may potentially implicate the anti-kickback statute.\9\
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\8\ OIG Compliance Program Guidance for Pharmaceutical
Manufacturers, 68 FR 23731 (May 5, 2003), available at https://oig.hhs.gov/authorities/docs/03/050503FRCPGPharmac.pdf. The guidance
is not limited to pharmaceutical manufacturers; it states, ``the
compliance program elements and potential risk areas addressed in
this compliance program guidance may also have application to
manufacturers of other products that may be reimbursed by [F]ederal
health care programs, such as medical devices and infant nutritional
products.'' Id. at 23742, n.5.
\9\ Id. at 23738.
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OIG also warned physicians that a consultant or speaking
arrangement with a drug or device company could be an improper
inducement ``to prescribe or use [company] products on the basis of . .
. loyalty to the company or to get more money from the company, rather
than because it is the best treatment for the patient.'' \10\ OIG
recommended that physicians consider the propriety of any proposed
relationship with a company and advised that if the basis for a
physician's compensation ``is your ability to prescribe a drug or use a
medical device or refer your patients for particular services or
supplies, the proposed consulting arrangement likely is one you should
avoid as it could violate fraud and abuse laws.'' \11\ Again, we note
that HCPs could face liability under the anti-kickback statute for
knowingly and willfully soliciting or receiving remuneration in
connection with speaker programs in return for prescribing or ordering
products reimbursable by a Federal health care program.
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\10\ A Roadmap for New Physicians, Avoiding Medicare and
Medicaid Fraud and Abuse, HHS-OIG, 22 (Nov. 2010), available at
https://oig.hhs.gov/compliance/physician-education/roadmap_web_version.pdf; OIG Compliance Program for Individual and
Small Group Physician Practices, 65 FR 59434 (Oct. 5, 2000),
available at https://oig.hhs.gov/authorities/docs/physician.pdf.
\11\ Id. at 23.
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OIG recognizes that the lawfulness of any remunerative arrangement,
including speaker program arrangements, under the anti-kickback statute
depends on the facts and circumstances and intent of the parties. Such
intent may be evidenced by the speaker program's characteristics and
the actual conduct of the parties involved. Below we describe some
characteristics, which, taken separately or together, potentially
indicate a speaker program arrangement that could violate the anti-
kickback statute. As previously stated, drug and device companies that
host or pay for such speaker programs and HCPs who speak at or attend
such programs could be liable under the anti-kickback statute for any
prohibited remuneration. This list of suspect characteristics is
illustrative, not exhaustive, and the presence or absence of any one of
these factors is not determinative of whether a particular arrangement
would be suspect under the anti-kickback statute.
The company sponsors speaker programs where little or no
substantive information is actually presented;
Alcohol is available or a meal exceeding modest value is
provided to the attendees of the program (the concern is heightened
when the alcohol is free);
The 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 on the
same or substantially the same topic or product, especially in
situations involving no recent substantive change in relevant
information;
There has been a significant period of time with no new
medical or scientific information nor a new FDA-approved or cleared
indication for the product;
HCPs attend programs on the same or substantially the same
topics more than once (as either a repeat attendee or as an attendee
after being a speaker on the same or substantially the same topic);
Attendees include individuals who don't have a legitimate
business reason
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to attend the program, including, for example, friends, significant
others, or family members of the speaker or HCP attendee; employees or
medical professionals who are members of the speaker's own medical
practice; staff of facilities for which the speaker is a medical
director; and other individuals with no use for the information;
The company's sales or marketing business units influence
the selection of speakers or the company selects HCP speakers or
attendees based on past or expected revenue that the speakers or
attendees have or will generate by prescribing or ordering the
company's product(s) (e.g., a return on investment analysis is
considered in identifying participants);
The company pays HCP speakers more than fair market value
for the speaking service or pays compensation that takes into account
the volume or value of past business generated or potential future
business generated by the HCPs.
IV. Conclusion
OIG has significant concerns about companies offering or paying
remuneration (and HCPs soliciting or receiving remuneration) in
connection with speaker programs. Based on our investigations and
enforcement actions, this remuneration is often offered or paid to
induce (or solicited or received in return for) ordering or prescribing
items paid for by Federal health care programs. If the requisite intent
is present, both the company and the HCPs may be subject to criminal,
civil, and administrative enforcement actions. This Special Fraud Alert
is not intended to discourage meaningful HCP training and education.
Rather, the purpose of this Special Fraud Alert is to highlight certain
inherent risks of remuneration related to speaker programs. Drug and
device companies and HCPs should consider the risks when assessing
whether to offer, pay, solicit, or receive remuneration related to
speaker programs.
We are issuing this alert during the pandemic emergency, which is
necessarily curtailing many in-person activities. While companies may
have decreased in-person speaker program-related remuneration to HCPs
during the pandemic, risks remain whenever payments are offered or made
to HCPs who generate Federal health care program business for the
company. The risks associated with speaker programs will become more
pronounced if companies resume in-person speaker programs or increase
speaker program-related remuneration to HCPs. Companies should assess
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 likewise
consider 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. If a company
or HCP has questions about a specific speaker program arrangement
involving remuneration to referral sources, the OIG Advisory Opinion
process remains available. Information about that process may be found
at: https://oig.hhs.gov/faqs/advisory-opinions-faq.asp.
III. Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution
When Entering Into Arrangements With Purported Telemedicine Companies
I. Introduction
The Office of Inspector General (OIG) has conducted dozens of
investigations of fraud schemes involving companies that purported to
provide telehealth, telemedicine, or telemarketing services
(collectively, Telemedicine Companies) and exploited the growing
acceptance and use of telehealth. For example, in some of these fraud
schemes Telemedicine Companies intentionally paid physicians and
nonphysician practitioners (collectively, Practitioners) kickbacks to
generate orders or prescriptions for medically unnecessary durable
medical equipment, genetic testing, wound care items, or prescription
medications, resulting in submissions of fraudulent claims to Medicare,
Medicaid, and other Federal health care programs. These fraud schemes
vary in design and operation, and they have involved a wide range of
different individuals and types of entities, including international
and domestic telemarketing call centers, staffing companies,
Practitioners, marketers, brokers, and others.
One common element of these schemes is the way Telemedicine
Companies have used kickbacks to aggressively recruit and reward
Practitioners to further the fraud schemes. Generally, the Telemedicine
Companies arrange with Practitioners to order or prescribe medically
unnecessary items and services for individuals (referred to here as
``purported patients'') who are solicited and recruited by Telemedicine
Companies. In many of these arrangements, Telemedicine Companies pay
Practitioners in exchange for ordering or prescribing items or
services: (1) for purported patients with whom the Practitioners have
limited, if any, interaction; and (2) without regard to medical
necessity. Such payments are sometimes described as payment per review,
audit, consult, or assessment of medical charts. Telemedicine Companies
often tell Practitioners that they do not need to contact the purported
patient or that they only need speak to the purported patient by
telephone. In addition, Practitioners are not given an opportunity to
review the purported patient's real medical records. Furthermore, the
Telemedicine Company may direct Practitioners to order or prescribe a
preselected item or service, regardless of medical necessity or
clinical appropriateness. In many cases, the Telemedicine Company sells
the order or prescription generated by Practitioners to other
individuals or entities that then fraudulently bill for the unnecessary
items and services.
These schemes raise fraud concerns because of the potential for
considerable harm to Federal health care programs and their
beneficiaries, which may include: (1) an inappropriate increase in
costs to Federal health care programs for medically unnecessary items
and services and, in some instances, items and services a beneficiary
never receives; (2) potential to harm beneficiaries by, for example,
providing medically unnecessary care, items that could harm a patient,
or improperly delaying needed care; and (3) corruption of medical
decision-making.
OIG encourages Practitioners to exercise caution and use heightened
scrutiny when entering into arrangements with Telemedicine Companies
that have one or more of the suspect characteristics described below.
This Special Fraud Alert provides information to help Practitioners
identify potentially suspect arrangements with Telemedicine Companies.
II. Multiple Federal Laws Implicated
The schemes described above may implicate multiple Federal laws,
including the Federal anti kickback statute. The Federal anti-kickback
statute is a criminal law that prohibits knowingly and willfully
soliciting or receiving (or offering or paying) any remuneration in
return for (or to induce), among other things, referrals for, or orders
of, items or services reimbursable by a Federal health care program.
One purpose of the Federal anti-kickback statute is to protect patients
from improper medical referrals or recommendations by health care
professionals and others who may be influenced by financial incentives.
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When a party knowingly and willfully pays remuneration to induce or
reward referrals of items or services payable by a Federal health care
program, the Federal anti-kickback statute is violated. By its terms,
the statute ascribes liability to parties on both sides of an
impermissible kickback transaction. Practitioner arrangements with
Telemedicine Companies may also lead to criminal, civil, or
administrative liability under other Federal laws including, for
example, OIG's exclusion authority related to kickbacks, the Civil
Monetary Penalties Law provision for kickbacks, the criminal health
care fraud statute, and the False Claims Act. Practitioners may be
personally liable for these types of arrangements, including for
submitting or causing the submission of claims if they are involved in
ordering or prescribing medically unnecessary items or services.
III. Recent Enforcement Experience
In recent years, OIG and the Department of Justice (DOJ) have
investigated numerous criminal, civil, and administrative fraud cases
involving kickbacks from Telemedicine Companies to Practitioners who
inappropriately ordered or prescribed items or services reimbursable by
Federal health care programs in exchange for remuneration. In those
cases, Practitioners, Telemedicine Companies, and other participants in
schemes have been held civilly, criminally, and administratively liable
for: (1) paying or receiving a payment in violation of the Federal
anti-kickback statute, (2) causing a submission of claims in violation
of the False Claims Act, and/or (3) other Federal criminal laws.
While the facts and circumstances of each case differed, often they
involved at least one Practitioner ordering or prescribing items or
services for purported patients they never examined or meaningfully
assessed to determine the medical necessity of items or services
ordered or prescribed. In addition, Telemedicine Companies commonly
paid Practitioners a fee that correlated with the volume of federally
reimbursable items or services ordered or prescribed by the
Practitioners, which was intended to and did incentivize a Practitioner
to order medically unnecessary items or services. These types of
volume-based fees not only implicate and potentially violate the
Federal anti-kickback statute, but they also may corrupt medical
decision-making, drive inappropriate utilization, and result in patient
harm.
IV. Suspect Characteristics
Based on OIG's and DOJ's enforcement experience, we have developed
the below list of suspect characteristics related to Practitioner
arrangements with Telemedicine Companies which, taken together or
separately, could suggest an arrangement that presents a heightened
risk of fraud and abuse. This list is illustrative, not exhaustive, and
the presence or absence of any one of these factors is not
determinative of whether a particular arrangement with a Telemedicine
Company would be grounds for legal sanctions.
The purported patients for whom the Practitioner orders or
prescribes items or services were identified or recruited by the
Telemedicine Company, telemarketing company, sales agent, recruiter,
call center, health fair, and/or through internet, television, or
social media advertising for free or low out-of-pocket cost items or
services.
The Practitioner does not have sufficient contact with or
information from the purported patient to meaningfully assess the
medical necessity of the items or services ordered or prescribed.
The Telemedicine Company compensates the Practitioner
based on the volume of items or services ordered or prescribed, which
may be characterized to the Practitioner as compensation based on the
number of purported medical records that the Practitioner reviewed.
The Telemedicine Company only furnishes items and services
to Federal health care program beneficiaries and does not accept
insurance from any other payor.
The Telemedicine Company claims to only furnish items and
services to individuals who are not Federal health care program
beneficiaries but may in fact bill Federal health care programs.
The Telemedicine Company only furnishes one product or a
single class of products (e.g., durable medical equipment, genetic
testing, diabetic supplies, or various prescription creams),
potentially restricting a Practitioner's treating options to a
predetermined course of treatment.
The Telemedicine Company does not expect Practitioners (or
another Practitioner) to follow up with purported patients nor does it
provide Practitioners with the information required to follow up with
purported patients (e.g., the Telemedicine Company does not require
Practitioners to discuss genetic testing results with each purported
patient).
Practitioners who enter into arrangements with Telemedicine
Companies in which one or more of these suspect characteristics are
present should exercise care and may face criminal, civil, or
administrative liability depending on the facts and circumstances. This
Special Fraud Alert is not intended to discourage legitimate telehealth
arrangements. For example, OIG is aware that many Practitioners have
appropriately used telehealth services during the current public health
emergency to provide medically necessary care to their patients.
However, OIG encourages Practitioners to use heightened scrutiny,
exercise caution, and consider the above list of suspect criteria prior
to entering into arrangements with Telemedicine Companies. This Special
Fraud Alert does not alter any person's obligations under any
applicable statutes or regulations, including those governing the
billing or submission of Federal health care program claims.
For more information on telehealth-related issues, please visit our
website, which includes additional materials relating to the provision
of telehealth. If you have information about Practitioners,
Telemedicine Companies, or other individuals or entities engaging in
any of the activities described above, please contact the OIG Hotline
at https://oig.hhs.gov/fraud/report-fraud or by phone at 1-800-447-8477
(1-800-HHS-TIPS).
Dated: August 17, 2022.
Gregory D. Demske,
Acting Principal Deputy Inspector General.
[FR Doc. 2022-18063 Filed 8-22-22; 8:45 am]
BILLING CODE 4150-01-P