Rare OIG Special Fraud Alert cautions use of speaker programs

In its Special Fraud Alert—which is the first issued since 2014—the HHS-OIG defined “speaker programs” as “company-sponsored events at which a physician or other health care professional makes a speech or presentation to other [health care providers] about a drug or device product or a disease state on behalf of the company.” The company sponsoring the speech generally pays the speaker an honorarium and often pays remuneration—for example, free meals—to the attendees.

The OIG stressed any party involved in speaker programs “may be subject to increased scrutiny.” This includes “any drug or device company that organizes or pays remuneration associated with the program, any HCP who is paid to speak, and any HCP attendees who receive remuneration from the company (e.g., free food and drink).”

In the last three years, drug and device companies have reported paying nearly $2 billion to healthcare providers (HCPs) for speaker-related services, according to HHS-OIG. The OIG expressly warned it’s “skeptical about the educational value of such programs” and cited numerous examples of investigations and fraud cases the OIG and Department of Justice have brought in connection with speaker programs that violated the Anti-Kickback Statute (AKS).

“Our investigations have revealed that, often, HCPs receive generous compensation to speak at programs offered under circumstances that are not conducive to learning or to speak to audience members who have no legitimate reason to attend,” OIG added. “Such cases strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals.”

The OIG stressed any party involved in speaker programs “may be subject to increased scrutiny.” This includes “any drug or device company that organizes or pays remuneration associated with the program, any HCP who is paid to speak, and any HCP attendees who receive remuneration from the company (e.g., free food and drink).”

Warning signs

The Special Fraud Alert further provides a list of “suspect characteristics” that, when combined with intent, could result in liability under the AKS. The specific characteristics compliance officers should be on alert for include:

• Little or no substantive information is presented;
• Alcohol or meals provided to program attendees exceed “modest value” (this concern is further heightened when the alcohol is free);
• The program’s location isn’t conducive to the exchange of educational information (e.g., entertainment or sports venues and, in certain circumstances, restaurants)
• The company sponsors several programs on the same or substantially similar topic or product;
• No new or recent medical or scientific information, nor a new FDA-approved or cleared indication, for the product;
• Repeat attendees on the same or substantially the same topics;
• Attendees who don’t have a “legitimate business reason” to attend the program;
• The company’s sales or marketing business units influence the selection of speakers or the company selects speakers or attendees based on past or expected revenue that they’ll generate (e.g., a return on investment analysis is considered in identifying participants); and
• The company pays HCP speakers more than fair market value for the speaking service.

The OIG said it acknowledged, however, these characteristics are “illustrative, not exhaustive” and that programs will be evaluated on individual facts and circumstances and the intent of the parties. That said, it recommended numerous other “less risky” ways to obtain information about drug and device products, including through various online resources; the product’s package insert; third-party educational conferences; medical journals; and more.

“The Special Fraud Alert marks the OIG’s clearest signal to date that speaker programs will be subject to continuing, and potentially heightened, enforcement scrutiny,” states a client alert from Hogan Lovells. Due to the heightened scrutiny OIG has signaled through issuing this Special Fraud Alert, Hogan Lovells added it “may be prudent for drug and device companies to reexamine the structure of their speaker programs and verify that those programs include appropriate safeguards to protect against any of the suspect characteristics identified by OIG.”

Of course, the least risky option would be foregoing them altogether.