Compliance Update – Providers and the Pharmaceutical Industry

Regulators are increasingly focusing on the propriety of certain relationships and interactions between health care providers and the pharmaceutical industry. Since this issue is on the minds of many providers, I am including below an article I recently wrote for Florida Medical Business Journal, the region’s leading medical business publication.

Avoiding Dangerous Medicine
Developing an Office Policy Regarding Doctor-Pharmaceutical Industry Interactions
Florida Medical Business Journal
by Stephen Snyder

By now, most physicians have resigned themselves to the unfortunate reality that virtually every practice management decision has a legal dimension. This reality is particularly acute with regard to a physician’s relationship and interactions with pharmaceutical companies.

Pharmaceutical company-doctor interactions are indirectly and directly governed by various laws and advisory guidelines. This article focuses on restrictions imposed on a provider’s receipt of things of value from a pharmaceutical company and thus relies upon the federal Anti-Kickback Statute, which prevents a doctor from receiving anything of value in return for prescribing or dispensing a drug to a patient who is the recipient of any federally-financed program (e.g., Medicare, Medicaid, VA). Guidance documents from the Department of Health and Human Services Office of Inspector General (“OIG”) and the Pharmaceutical Research and Manufacturers of America also contain important, albeit not directly controlling, ground rules. Finally, the American Medical Association has developed rules regarding such relationships and interactions.

The typical patient-focused physician cannot possibly review all of these laws and advisory documents; much less the other regulations that may govern in certain scenarios. If he or she somehow manages to do so, he or she will still have to consider how these regulations should be applied to his or her unique situation. This reality is troubling since inappropriate interactions or relationships with pharmaceutical companies can result in civil and criminal penalties.

In view of this labyrinth of regulations and advice, every hospital and practice -especially medium to large practices – should consider developing a written policy regarding interactions with pharmaceutical companies. While the development of such a policy is not a legal requirement, an appropriate policy will ensure that every physician understands the expectations of the practice, act as protective legal hedge and simplify every physician’s daily decision making process.

As with every policy, the pharmaceutical company interaction policy should be as straightforward and non-technical as possible. Further, the policy should, at a minimum, address the following issues.

Commitment to Compliance

The policy should begin with a statement regarding the practice’s commitment to complying with all controlling laws and standards of professional ethics.

Nature of Interactions

The policy should state that the primary purpose of every interaction between a physician and a pharmaceutical representative should be the exchange of scientific and educational information, so as to maximize the wellbeing of patients.

Food and Beverage

Survey results published in the April 2007 issue of the New England Journal of Medicine demonstrate that 83% of its respondents received food or beverages from pharmaceutical representatives. Such meals are acceptable so long as they are “modest.” Generally speaking, the AMA indicates that “modest” means that the meal is of the type and value that the physician would purchase if he or she was picking up the tab.

Cash Payments

Your policy should indicate that cash payments are never acceptable. However, modest contributions to a charity on the doctor’s behalf may be acceptable; especially if the pharmaceutical company selects the charity.

Other Gifts

A doctor may accept non-cash gifts of nominal value (i.e., approximately $100). Your policy may permit a physician to accept certain gifts that somehow entail a benefit to the patients and these gifts may include textbooks, stethoscopes, pens, writing pads, handheld device or the like.

Conference or Continuing Education

Payments made to the sponsors of a legitimate professional conference or continuing education course in order to subsidize the events are acceptable. The sponsor may then reduce the attendance fees, on an equal basis, due to its receipt of the contribution. Payments made directly to attendees relative to registration, travel or lodging expenses are not permitted.

Speaking, Consulting and Clinical Fees

23% of the physician-respondents to the New England Journal of Medicine survey indicate they have received fees from pharmaceutical companies for consulting, speaking engagements or enrolling patients in clinical trials. If these fees are customary in their amount and nature and are paid for the legitimate purpose of compensating a physician for his actual work, these fees are acceptable. However, the policy should provide certain guidelines for determining whether a fee arrangement is appropriate (e.g., range of fees, requirement that actual work – not simply listening to a sales pitch – be undertaken and documented, etc.)

Drug Samples

Physicians, especially those in private practice, often receive drug samples from pharmaceutical representatives. The compliance policy may sanction this practice since it is typically aimed at benefiting a physician’s patients and is thus wholly appropriate. However, the policy should state that a physician’s use of free samples for himself/herself, family members or friends should be rare.

Quid pro Quo

A doctor may not accept any incentive for writing prescriptions. The compliance policy should reiterate the fact that any ‘switching arrangements’ or payments offered to induce prescription writing or dispensing are unlawful.

HIPAA

Gone are the days when a physician could allow a pharmaceutical representative to see a patient’s file. The policy should provide that all disclosures must comply with HIPAA and a practice’s policies relating to same.

The rules governing a physician’s inĂeractions with pharmaceutical companies can be complex. Nevertheless, by devoting a minimal amount of time and effort to the creation of a policy, a hospital or practice can ensure that its physicians understand the proper rules of interaction and can protect itself from possible civil and criminal liability.

Disclaimer: The information contained within the MTBC® Learning Center is provided for general educational and informational purposes only and should not be construed as legal advice. The author of the Learning Center does not represent the Web site user or the individual submitting a particular question. Please seek the advice of legal counsel to address any specific questions you may have regarding your particular facts or circumstances