Connecticut

March 30, 2009 An incisivemedia publication

Vol. 35, No. 13 • $10.00 ctlawtribune.com

Tough Medicine For Physicians

Involved In Fraud
Prosecutors take hard look at payments from drug companies
By JONATHAN N. HALPERN hundreds of millions of dollars to resolve cepting compensation on the condition that
and KEVIN J. O’CONNOR government allegations that they paid kick- she will order or prescribe the company’s
backs (in various forms) to physicians and product, whether it be surgical equipment,

I n the midst of our current economic cri-

sis, there have been, not surprisingly, nu-
merous calls for prosecutors to aggressively
other health care providers to induce them
to prescribe or use the companies’ products
medical devices or medications. In so do-
ing, prosecutors are looking for evidence
and services. such as a simultaneous increase in physi-
investigate and prosecute those responsible Indeed, a principal purpose of the anti- cian compensation and volume of business
for the various Ponzi schemes and mort- kickback statute is to help preserve the the physician is doing with the company
gage frauds that have been exposed. integrity of the phy- compensating her.
In the midst of this public clamor, the U.S. sician/patient re- To determine
departments of Justice and Health and Hu- lationship and whether such a
man Services jointly announced that they thwart some mon- pattern exists,
intend to enhance their efforts in a differ- etary influences prosecutors will
ent area – health care fraud – by targeting that, according to focus on the phy-
physicians and scrutinizing their financial prosecutors and sician’s historic re-
arrangements with drug and device manu- regulators, might lationship
facturers. The impetus was a belief among undermine with the
prosecutors that an enforcement effort tar- the phy- c omp any
geted at companies – no matter how success- s i c i a n’s and/or
ful – is not alone sufficient to deter health impartial product
care fraud. To be more effective, prosecutors and pro- to deter-
believe, the physicians involved in such ar- fessional mine if an
rangements must also be held accountable medical explicit or
through criminal or civil charges. judgment. Now, federal prosecutors will implicit agreement can be identified. Such
Although this announcement received apply the anti-kickback statute (42 U.S.C. arrangements are viewed as corrupting the
less attention in our current economic cli- Section 1320a-7b(b)) and aggressively ex- physician’s independent medical judgment.
mate than it might otherwise, it is no less amine the conduct of the physicians receiv-
important, particularly for physicians who, ing compensation, whether in the form of Greater Transparency
as a result, may find themselves under in- salary (consulting agreements are certain to The law enforcement crackdown on
tense government scrutiny. be examined closely), speaking fees, vaca- health care kickbacks also arises amidst
tions or conferences, meals, tickets, third- a legislative campaign to provide greater
Kickback Schemes party payments or donations. Whenever transparency in the relationship between
This focus on the role of physicians in such compensation exists, prosecutors will physicians and manufacturers of drugs,
kickback schemes comes in the wake of an be looking to determine if it is linked to an devices, and medical supplies. Under the
impressive string of large federal anti-kick- agreement or understanding – however im- Physician Payments Sunshine Act of 2009,
back prosecutions and civil cases against plicit or nuanced – that the physician is ac- manufacturers would be required to report
corporations that provided compensation
to physicians in an effort to promote their Jonathan N. Halpern (left), a partner with Bracewell & Giuliani LLP, serves individual
products. and corporate clients as counsel in complex criminal, civil, and regulatory matters. Kevin J.
In example after example, a broad array O’Connor (right), also a partner in the firm, handles commercial litigation and white-collar
of health care companies have agreed to pay criminal enforcement matters for corporations, private investment funds and individuals.
This article is reprinted with permission from the march 30, 2009 issue of the Connecticut Law Tribune. © Copyright 2009. Incisive Media US Properties, LLC. All rights reserved. duplication without permission is prohibited. All rights reserved.
MARCH 30, 2009
annually to HHS all payments or transfers
of value to a physician and medical and
group practice. With some limited excep-
tions, annual disclosure must be made of
any ownership interest that a physician or
close family member holds in the manufac-
turer or group purchasing organization.
There are steps that can be taken to re-
duce the likelihood of a government inves-
tigation. Companies or individuals with
inquiries about the application of the anti-
kickback statute to particular arrangements
CONNECTICUT LAW TRIBUNE
may obtain an advisory opinion from HHS’s
Office of Inspector General. The opinion is
binding on the requestor only and limited
to the facts presented, and it is provided
on the further condition that all material
information was disclosed and presented
accurately. And for non-requestors, the
opinions also can provide guidance about
certain relevant principles and insight into
the government’s thinking regarding vari-
ous payment and gift arrangements.
The consequences for a physician facing a
2
criminal investigation can be devastating. A
conviction could mean loss of the physician’s
medical license, at least for some time period,
debarment from federal health programs, im-
prisonment and criminal fines and penalties.
Accordingly, physicians as well as manu-
facturers of drugs, devices, and medical
supplies would be well advised to review
their existing compliance programs, as well
as any existing consulting and other agree-
ments to ensure that they are in full compli-
ance with the existing healthcare laws. n