The Department of Justice (DOJ) recently resolved two health care fraud cases – one criminal and one civil – that demonstrate the government’s continued scrutiny of lavish meals and “speaker’s bureaus” sponsored by pharmaceutical and device manufacturers as potential avenues for the payment of kickbacks to physicians for referrals of health care items and services. These cases indicate the criminal and civil risk that providing lavish meals or purported speaker’s bureau payment can pose, and the corresponding need to proactively assess the legitimacy of such programs and events.
First, on March 8, 2018, the U.S. Attorney’s Office for the District of Massachusetts announced a $3.1 million dollar settlement with Abiomed, Inc., to resolve allegations that Abiomed violated the Anti-Kickback Statute (AKS) and False Claims Act (FCA) by inducing physicians to use its products. Abiomed allegedly violated the AKS by paying for expensive meals for physicians (and their spouses) in excess of Abiomed’s own guidelines for such events, and by listing fictitious attendees at such meals to reduce the per-attendee cost of the meal, in order to influence the attendee-physicians to order and use Abiomed heart pumps. Interestingly, in its settlement announcement the DOJ highlighted the fact that Abiomed’s per-meal payments exceeded “Abiomed’s own $150 per person guideline,” which raises a question as to whether the alleged AKS violation arises (in part) from Abiomed’s violation of its self-imposed guidelines, or whether violation of those guidelines was seen by the DOJ as evidencing an improper motive underlying the per-meal payments. The settlement stemmed from a whistleblower complaint filed by a former Abiomed employee.
Second, on March 9, 2018, the U.S. Attorney’s Office for the District of Rhode Island announced that a physician had been sentenced to over four years in federal prison for committing health care fraud and for violating the AKS. In this case, the physician admitted to soliciting and receiving kickbacks in excess of $188,000 in the form of purported speaker fees from a pharmaceutical company to induce him to prescribe Subsys, a highly-addictive version of the drug Fentanyl. The physician also admitted to committing health care fraud by falsely claiming that patients had “breakthrough pain from cancer” in order to secure approval for Subsys prescriptions from payors (including Medicare). Notably, this case is one of a number of criminal convictions that have been secured against providers for accepting kickbacks from Insys – the Arizona-based manufacturer of Subsys – through its speaker programs, and Insys and certain of its employees are currently the subject of cases involving similar allegations in other jurisdictions.
This post was co-authored by Chelsea Sousa, legal intern at Robinson+Cole. Chelsea is not yet admitted to practice law.