Medicare Compliance & Reimbursement

Drugmakers and health care providers alike got an important lesson in Medicare compliance April 23, when the HHS Office of Inspector General's final compliance program guidance for pharmaceutical manufacturers hit the streets.

While the guidance is obviously tailored for drugmakers, the nature of the compliance red flags outlined in the document potentially implicate physicians and other kinds of health care providers - which means that no one in the health care industry can afford to overlook it.

Moreover, the OIG has taken pains to spell out just where it thinks the biggest risk areas are - the final CPG is far more detailed than the draft version issued last October. Here are the hot spots in a nutshell:

Data Integrity: Drugmakers face both False Claims Act charges and potential kickback prosecution if they report inaccurate pricing data to the government.

Kickbacks: Pharma companies' networks of business arrangements essentially form a kickback minefield, the OIG warns. The agency cautions that pitfalls could be hidden in arrangements with purchasers, benefit managers, formulary committee members, group purchasing organizations, physicians, certain allied health professionals and pharmacists.

The guidance enumerates a wide range of potentially suspect activities, from "marketing the spread" to bogus educational grants.

Heads up physicians. Doctors' relationships with drugmakers are fraught with perils, and enforcement on this front may be coming to a boil. The CPG zeros in on, among other things, "switching" arrangements, under which doctors receive a fee when a patient switches medications; trumped up consulting or advisory payments; lavish gifts of entertainment, travel, meals and recreation in connection with marketing presentations; and questionable educational and research funding. The agency also suggests that doctors who make sales reps pay for their time could be running big kickback risks.

The safest bet, the OIG suggests, is for physicians and drugmakers to seek safe harbor protection (see related story, in "Business Arrangements").

Drug Samples: This one is fairly straightforward: Don't bill for free drug samples.

Lesson Learned: As health care fraud enforcement heats up for drugmakers, physicians and other health care providers risk getting caught in the crossfire - unless they take precautions.