Client Alert Contact Attorneys New OIG Advisory Opinions Regarding - - PDF document

New OIG Advisory Opinions

The Offi ce of Inspector General of the Department of Health & Human Services (the “OIG”) posted three new Advisory Opinions in February 2008 that may be of interest to your company. The following is a brief summary of the three Opinions. This forum limits our summary to the highlights of each Opinion; please contact Jenny Burgar or Alan Minsk should you desire a more detailed analysis or to discuss the implications of the Opinions on your company.

OIG Advisory Opinion No. 08-02: Charitable Contribution as Compensation for Survey Participation

The OIG reviewed a pharmaceutical and device marketing and research company’s practice of encouraging physicians to complete web-based surveys by allowing the physicians to designate a public charity to receive a monetary contribution as compensation for completing the survey. The OIG found that the program did not implicate the federal anti-kickback statute because of the following safeguards included in the program: Contributions are made only to 501(c)(3) tax exempt and 509(a) public

• charities, not to private foundations. The charity has total control over the use
• f the funds; they are not “earmarked” for a particular purpose.

The physicians did not receive a personal benefi t, as they were not able to

• claim a tax deduction for the contribution, and they must certify that neither

they, nor any immediate family member, holds a position on the board of the designated charity, is employed by the charity, or has any other fi nancial relationship with the charity. The drug or device company sponsoring the survey would not be apprised of

• any individual physician’s charity of choice.

There is a reasonable limit on the amount of money donated per survey and an

• annual aggregate donation cap for each charity.

This Advisory Opinion is also helpful because the OIG identifi ed examples of “potentially problematic” charitable donations, including: Donations to charities, including private foundations affi liated with or

• controlled by or employing physicians or healthcare professionals, as a way to

channel unlawful remuneration to those physicians or healthcare professionals. Contributions “earmarked” (explicitly or implicitly) to benefi t a referral source or

• the referral source’s medical practice. For example, the OIG is concerned about

donations by a drug or device company which are earmarked for uses that benefi t a particular physician’s medical practice, such as through research

• Arnall Golden Gregory LLP

Attorneys at Law 171 17th Street NW Suite 2100 Atlanta, GA 30363-1031 404.873.8500 www.agg.com Alan G. Minsk 404.873.8690 - direct 404.873.8691 - fax alan.minsk@agg.com Contact Attorneys Regarding This Matter:

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Jennifer Downs Burgar 404.873.8194 - direct 404.873.8195 - fax jennifer.burgar@agg.com

grants or the provision of staffi ng by fellows. Contributions to charities that provide free or below market rate offi ce space, equipment or staff to a referral

• source or a referral source’s medical practice.

Contributions determined in any manner that takes into account past or expected prescriptions, orders or

• purchases of items or services payable by Medicare or Medicaid.

OIG Advisory Opinion No. 08-04: Free Trial Prescription Program

In Opinion 08-04, the OIG reviewed and approved a program whereby patients can receive a free trial of an expensive hemophilia drug. While the OIG has historically approved free trial programs that are appropriately structured, it is helpful to review this Opinion for a refresher on the structure and safeguards the OIG likes to see in place for free trials.

The program is limited in scope, as physicians are limited to no more than twenty patients per year for participation in

the program. The manufacturer will provide the minimum amount of the drug necessary to determine its effi cacy for the

• participating patient. As such, the amount of free drug is tailored to each patient, rather than an arbitrary, and

perhaps too large, amount of drug. Patients are not permitted to enroll in the program more than once and are limited to one trial. Patients currently

• n the medication cannot participate in the program.

A program administrator ships the drug directly to the patient. As such, the referring physician never takes

• possession of the drug, limiting concerns that the physician might bill Medicare or Medicaid for the medication or

attempt to resell it. The program was certifi ed as being in compliance with the Prescription Drug Marketing Act of 1987.

• Medicare and Medicaid are not charged for any aspect of the free trial. The referring physician, the patient and the
• program administrator dispensing the medication are all required to sign an acknowledgement that the drug is

free and no claim may be fi led for reimbursement. The referring physician does not receive any compensation or reimbursement for enrolling a patient.

• There are no clinical barriers to switching to another, competing medication after the trial, and the medication is
• not prone to overutilization because of the nature of its indications. As such, this program would not alone foster

consumer demand.

OIG Advisory Opinion No. 08-05: Placing Electronic Kiosks In Physician Offi ces

The OIG reviewed and approved of a drug manufacturer’s placement in physician offi ce waiting rooms of electronic kiosks that offer patients free disease state questionnaires. The OIG referred to the kiosks as “high-tech interactive brochures.” The kiosks use interactive questionnaires about the drug company’s target disease states to help patients determine whether they should discuss symptoms of any of the disease states with their physician. The kiosks generate a print-out that the patient can then share with his physician. Page 2/3 Arnall Golden Gregory LLP

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The OIG concluded that the kiosks were no different from the common paper brochures often left by drug companies in waiting rooms and in pharmacies or from television commercials. The kiosks do not provide any inducement to patients such as coupons or gifts. The questionnaires do not reference any particular drug and only identify the drug company through a discrete “brought to you by” footer with the company’s logo. Further, physicians are not provided with remuneration in exchange for hosting the kiosk; in fact, the physician must provide the electricity to run the kiosk. Physicians are not required to make referrals for the company’s products in exchange for receiving a kiosk. The kiosk remains the property of the company and has no independent value for the host physician. The OIG did caution that the kiosks would be viewed as a type of “direct to consumer” advertising, and that they may implicate federal or state consumer protection laws, FDA regulations and/or FTC regulations. Because the kiosks do not capture any personal information, privacy laws are not implicated, but the OIG cautioned that the collection of such information by another type of kiosk may require privacy law compliance. ********** If you would like additional information about any of the Advisory Opinions, please contact Jenny Burgar at jennifer. burgar@agg.com or 404-873-8194, or Alan Minsk at alan.minsk@agg.com or 404-873-8690.

This alert provides a general summary of recent legal developments. It is not intended to be, and should not be relied upon as, legal advice. Arnall Golden Gregory LLP serves the business needs of growing public and private companies, helping clients turn legal challenges into business opportunities. We don’t just tell you if something is possible, we show you how to make it happen. Please visit our website for more information, www.agg.com.

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