Our lead story in today’s Part B News looks at the outrageous provider kickbacks uncovered in the current trial of several Insys Therapeutics executives, and how you can make sure nothing like that happens where you work. Three of our contributors have further thought on the matter.
James Peter Smeriglio III, associate attorney at Jordan Law FL, P.A. in Orlando, Fla.: First and foremost, [practices] need to ensure that any sales reps coming into their office to speak with [providers] are signing in or someone in the office is logging the visit. Beyond that, visits should be for the primary purpose of educating the doctor and the office on whatever product is being pitched. That's really the biggest key. Try not to accept gifts at these meetings beyond lunches, fruit baskets, etc. I know some medical sales companies have become much more stringent in recent years regarding dollar amounts of what they allow their reps to buy. Some try to keep the dollar amount of a visit under $50 for an entire office now.
More than anything, the biggest thing here is common sense. Don't accept lavish gifts, don't set meetings for anything other than educational purposes. Perception is reality, and having the regulatory agencies looking over your back for no reason just isn't worth it.
Jay Anstine, a health care corporate compliance expert in Fort Collins, Colo. Under Stark Law, there actually doesn’t need to be any evidence of intent in order to violate the law. I often tell people it functions much like a speeding ticket. If the speed limit is 75 miles an hour, and you’re on your way to the hospital going 76, technically you can still get pulled over…
First, related to Stark, you would want to make sure the dollar amount you are allowing [vendors to give] to a physician matches annually what Stark allows. Currently it’s $416 in 2019. Also, make sure you’re tracking the definition of “nonmonetary compensation” under Stark to define what gifts are acceptable in your policy. For example, holiday baskets, flowers, and modest lunches for physicians would all be acceptable forms of nonmonetary compensation. In contrast, the nonmonetary compensation exception does not allow cash or cash equivalents, such as gift cards, to be given.
Second, as it relates to the anti-kickback statute, you want to make sure the policy clearly states a business courtesy can never be solicited, offered, given, or received in a manner that takes into account the volume or value referrals a federal health care program business. Additionally, any amount given should be nominal in value.
Eric D. Fader, partner with the Rivkin Radler firm in New York: There's so much of this going on, particularly with smaller, private companies. I have people asking me about deals all the time: “Joe's doing this, why not me?”… [or] “I know I can’t pay my marketing company a straight percentage of professional fees collected. But can I pay them a ‘success fee’ for every account [referring hospital or other referral source] they bring in?”
A lot of questions are about “joint ventures” of one sort or another, which usually come down to Party A and Party B forming a new LLC (Party C). Party A wants to do virtually nothing but refer or arrange for the referral of patients, directly or indirectly; Party B is supposed to do or arrange for all the work that will be provided under the name of Party C; and Party A wants the income to be divided roughly equally.
Vendors or service providers have to be legitimately doing what they say they're doing. [Take] Intraoperative neurophysiological monitoring (IONM) [providers]. They market to hospitals, which are pretty conservative and have in-house counsel, so they don't have to worry much about fraud and abuse. But they also market to surgeons, sometimes through third-party marketers. And maybe the only thing the third-party marketer has is a friendly relationship with some surgeons. Is the third-party marketer legit? Or do they just have a connection, and are they kicking back to the people to whom they're marketing?