The assumption that the federal antikickback law only applies to physicians and indirect or direct remuneration provided physicians to induce them to make patient referrals is incorrect. Remuneration of any kind offered to an orthotist or prosthetist intended to induce the orthotist or prosthetist to use a particular orthotic device or prosthetic component that will be paid for by a government program such as Medicare or Medicaid is also problematic under the federal antikickback law. The medical device and pharmaceutical industries have drastically cut back or eliminated forms of remuneration such as "educational programs" offered at resort locations to physicians and even their spouses. These programs often included a short presentation promoting a new drug the sponsor wanted to sell, followed by golf, lavish dinners, and plenty of free time for the physician to shop and sightsee. The sponsoring drug company paid for everyone's expenses. While pharmaceutical companies defended these programs in the name of clinical education, all-expense-paid trips to meetings created not only a potential violation of the antikickback law, they also put physicians in a potential conflict-of-interest situation under their profession's code of ethics by creating a perception that the best interest of the patient may not have been the sole reason a particular prescription was written. An orthotic or prosthetic device manufacturer offering to pay some or all expenses of an orthotist or prosthetist to attend a meeting either at the home office of the manufacturer or some other location to "educate" the orthotist or prosthetist on a device and its uses is no different than the situation I described above. Gifts, meals, and other forms of business support a manufacturer may give of more than nominal value because the orthotist, prosthetist, or company is a good customer are included in this category. An article I recently read suggested that the question you must ask yourself is, "What is in it for me?" What is in it for me if I bring lunch or doughnuts to a physician's staff? If the answer has anything to do with generating referrals, don't do it. If you do want to bring a modest breakfast or lunch to a physician's staff, you need to bring it along with a good educational presentation that is intended to improve patient care. What about if an orthotic company sets up a consignment closet in a physician's office? It's no different than a manufacturer entering into a consignment arrangement in an orthotic office, right? In each instance, something of value is being offered and accepted (i.e. inventory without investment), with a government program ultimately paying for it. If even one purpose in doing so is to induce referrals, and Medicare or Medicaid pays for it, then there could be a problem. Many hospitals and medical schools have gone so far as to prohibit their physicians and staff members from accepting anything of value because of the conflicts they cause. Some also require vendor representatives to listen to a formal presentation on what is and is not acceptable when approaching hospital physicians about their products. Others only allow scheduled visits, which must be documented as to what was discussed. Orthopedic implant companies and large domestic and international pharmaceutical companies are doing the same by severely restricting what their sales and marketing staffs are permitted to offer physicians. Marketing methods in healthcare delivery are changing. While sales staffs are generally knowledgeable and ethical in their dealings with physicians and orthotists/prosthetists, the financial incentive to sell is sometimes too great for some. The safe harbors under the antikickback law do not permit the payment of non-employee sales staff on the basis of a percentage of sales because of the enhanced risk of using sales tactics not acceptable to the government. To meet a safe harbor, only employed sales staff can be paid on a commission basis. As an employer, be sure to have policies in place that restrict your sales staff from using prohibited methods to induce the purchase of your products, and stay on top of what is being done to promote your company's products to your referral sources. Any decision made by a physician or an orthotist should be based solely on what is in the patient's best interest and not because of who brought what lunch, clock, or free samples this week. While it may seem that no professional would have his or her judgment clouded by these things, the facts present a different story. Billions of dollars are spent annually to try to influence the prescribing pattern of physicians. While on a much smaller scale, this happens in orthotics and prosthetics also. Promoting orthotic devices on the basis of research results, medical necessity, cost, and benefits to patients is how clinical decisions should be made. John Latsko is a partner in the health law practice of Schottenstein, Zox & Dunn, Columbus, Ohio. He can be contacted at 614.462.2329; jlatsko@szd.com
The assumption that the federal antikickback law only applies to physicians and indirect or direct remuneration provided physicians to induce them to make patient referrals is incorrect. Remuneration of any kind offered to an orthotist or prosthetist intended to induce the orthotist or prosthetist to use a particular orthotic device or prosthetic component that will be paid for by a government program such as Medicare or Medicaid is also problematic under the federal antikickback law. The medical device and pharmaceutical industries have drastically cut back or eliminated forms of remuneration such as "educational programs" offered at resort locations to physicians and even their spouses. These programs often included a short presentation promoting a new drug the sponsor wanted to sell, followed by golf, lavish dinners, and plenty of free time for the physician to shop and sightsee. The sponsoring drug company paid for everyone's expenses. While pharmaceutical companies defended these programs in the name of clinical education, all-expense-paid trips to meetings created not only a potential violation of the antikickback law, they also put physicians in a potential conflict-of-interest situation under their profession's code of ethics by creating a perception that the best interest of the patient may not have been the sole reason a particular prescription was written. An orthotic or prosthetic device manufacturer offering to pay some or all expenses of an orthotist or prosthetist to attend a meeting either at the home office of the manufacturer or some other location to "educate" the orthotist or prosthetist on a device and its uses is no different than the situation I described above. Gifts, meals, and other forms of business support a manufacturer may give of more than nominal value because the orthotist, prosthetist, or company is a good customer are included in this category. An article I recently read suggested that the question you must ask yourself is, "What is in it for me?" What is in it for me if I bring lunch or doughnuts to a physician's staff? If the answer has anything to do with generating referrals, don't do it. If you do want to bring a modest breakfast or lunch to a physician's staff, you need to bring it along with a good educational presentation that is intended to improve patient care. What about if an orthotic company sets up a consignment closet in a physician's office? It's no different than a manufacturer entering into a consignment arrangement in an orthotic office, right? In each instance, something of value is being offered and accepted (i.e. inventory without investment), with a government program ultimately paying for it. If even one purpose in doing so is to induce referrals, and Medicare or Medicaid pays for it, then there could be a problem. Many hospitals and medical schools have gone so far as to prohibit their physicians and staff members from accepting anything of value because of the conflicts they cause. Some also require vendor representatives to listen to a formal presentation on what is and is not acceptable when approaching hospital physicians about their products. Others only allow scheduled visits, which must be documented as to what was discussed. Orthopedic implant companies and large domestic and international pharmaceutical companies are doing the same by severely restricting what their sales and marketing staffs are permitted to offer physicians. Marketing methods in healthcare delivery are changing. While sales staffs are generally knowledgeable and ethical in their dealings with physicians and orthotists/prosthetists, the financial incentive to sell is sometimes too great for some. The safe harbors under the antikickback law do not permit the payment of non-employee sales staff on the basis of a percentage of sales because of the enhanced risk of using sales tactics not acceptable to the government. To meet a safe harbor, only employed sales staff can be paid on a commission basis. As an employer, be sure to have policies in place that restrict your sales staff from using prohibited methods to induce the purchase of your products, and stay on top of what is being done to promote your company's products to your referral sources. Any decision made by a physician or an orthotist should be based solely on what is in the patient's best interest and not because of who brought what lunch, clock, or free samples this week. While it may seem that no professional would have his or her judgment clouded by these things, the facts present a different story. Billions of dollars are spent annually to try to influence the prescribing pattern of physicians. While on a much smaller scale, this happens in orthotics and prosthetics also. Promoting orthotic devices on the basis of research results, medical necessity, cost, and benefits to patients is how clinical decisions should be made. John Latsko is a partner in the health law practice of Schottenstein, Zox & Dunn, Columbus, Ohio. He can be contacted at 614.462.2329; jlatsko@szd.com