Medicare Compliance & Reimbursement

Picture this: Health & Human Services' OIG inspectors arrive at a physician office with a list of all the drug samples that the physician has received from pharma companies over the past two  years. And they want to cross check the information against the physician's records and billing.

That scenario could become reality once a healthcare reform legislation provision goes into effect. Starting in 2012, drug companies will have to inform HHS annually what drug samples they gave to which physicians.

Details required: The company will report in the aggregate, "I gave Dr. Jones in Morristown, New Jersey, 100 of this product, 50 of that product, etc.," says attorney John Oroho, in Morristown, N.J. The first reports will span from Jan. 1 through Dec. 31, 2011, he adds.

Bottom line: The reporting "provision will make it easier for the federal government to track who received samples and then ask physicians to account for how they used the samples," says Baltimore attorney Joshua Freemire.

The new reporting requirement opens a new can of compliance worms or, perhaps more accurately, makes it easier for the government to pursue existing ones. Here's what to watch for and do.

1. More transparency in billing investigations. "Doctors are not supposed to bill patients or payors for drug samples," Freemire says. Physicians have done that in the past, "perhaps as a result of mistaken or improper record keeping." And it can land them in compliance hot water.

Example: In 2004, "the OIG accused two physicians of violating the Civil Money Penalty (CMP) statute for billing government payors for free samples of the anti-cancer drug Lupron," Freemire says. "Both physicians settled" with the government.

Proactive strategy: For compliance and clinical reasons, physicians should pay close attention to how they track drug samples. Log drug samples when you receive them by drug "name, strength, quantity received, and lot numbers," advises Sharon Keuscher, CCS-P, office manager for Kidney Consultants of El Paso, Texas. Then use that same log to document each time you dispense a drug sample, as well as making a note in the patient's medical record, she adds.

2. Beneficiary inducement issues. The detailed drug sample data could also make it easier for authorities to investigate complaints that a physician is luring patients to his practice by handing out inordinately large amounts of free drug samples.

"If a patient has no idea that he's going to get drug samples when he goes to the doctor, you can't say [receiving the samples] was an inducement for him to see that physician," says attorney Lisa Ohrin in Washington, D.C.

"But if the doctor purposefully makes you aware that when you come for a visit, you get a full course of antibiotics and will not have to fill a prescription ... that's a different situation," she points out. "You have to think about it in terms of an actual situation."

2 more proactive strategies: Ohrin recommends physicians document in the medical record the quantity of any free samples they give to patients. "If the physician gave a patient two pills -- and the patient later claims the physician gave her 25 -- you want that written documentation showing how many pills you gave" the person, says Ohrin.

Also develop a policy in advance that spells out parameters for giving patients samples ("when, how much, to whom"), advises attorney Chris DeMeo, in private practice in Houston, Texas. Make the policy general in nature so that it provides some flexibility, he adds. The practice can't predict what scenarios it may encounter down the line, DeMeo points out. And "the practice does not want to end up in a situation where it is violating its own policy."

3. Potential anti-kickback implications. Physicians face a bigger concern than potential allegations of beneficiary inducement, in DeMeo's view. And that is their relationship with the pharmaceutical manufacturer, he says. Receiving "free samples from the pharmaceutical companies raises exposure under the anti-kickback statute, if the physician returns the favor by prescribing that company's products."