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Medicare Compliance & Reimbursement

Business Arrangements:

5 RED FLAGS FOR DRUGMAKER-DOC BUSINESS ARRANGEMENTS

Published on Wed May 07, 2003

Physicians and pharmaceutical companies are in the kickback enforcement crosshairs, as the HHS Office of Inspector General's recent compliance guidance for drugmakers makes clear.

Any time a physician gets something of value from a pharma company - whether it's a consulting fee or a free dinner - kickback concerns may come into play.

While the OIG says docs and drugmakers should fit their business arrangements into a safe harbor (such as those for personal services and management contracts) that's not always possible. But the agency does offer some advice on this tricky topic.

When the safe harbor option is closed, the OIG says, take a close look at these five issues:

  • The nature of the relationship. How much business is the physician capable of generating for the drugmaker? Do the parties have other affiliations?

  • How payments are determined. If they're based on referrals, watch out.

  • The value of the payments. Beware if they exceed fair market value.

  • Impact on federal health care programs. Will the payments lead to overutilization?

  • Potential conflicts of interest. The payment shouldn't cloud - indeed, shouldn't even appear to cloud - the doctor's professional judgment.

     

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