Copyright©2002 IMDA
Kickback guidelines proposed
IMDA members should pay attention to
recently published federal guidelines regarding kickbacks. Although the
guidelines, issued in early October by the Office of the Inspector General of
the Department of Health and Human Services, pertain to drug manufacturers, they
could find their way into the medical device sector as well.
The draft compliance guidelines for pharmaceutical manufacturers are
meant to help drug companies and their sales reps follow anti-kickback statutes,
which prohibit the offer or payment of anything in value to induce healthcare
providers to buy drugs or products that are reimbursable by Medicare or
Medicaid. They were published in the Federal Register (Oct. 3, Vol. 67, No. 192,
or on the Web at
www.oig.hhs.gov.).
“Though the regulations are principally directed to pharmaceutical
manufacturers, they may be read to apply to other companies that market products
considered pharmaceuticals and biomedicals,” wrote IMDA Legal Counsel Mitchell
Kramer in an Oct. 31 memo to the IMDA board. “Specific types of conduct that may
be impermissible under these regulations include consulting and advisory
payments, payments for entertainment, recreation, travel and meals; sponsoring
educational conferences; funding scholarships, etc. to healthcare providers and
others who influence the decision to purchase products.
“In addition, as we have addressed in the past, the anti-kickback
regulations can be broadly read to prohibit entirely the payment of commissions
for the sale of medical products. As many of you know, this has been a matter of
ongoing concern to IMDA.”
Discounts a sticky issue
The guidelines state that manufacturers can potentially be in violation
of anti-kickback laws when they offer wholesalers “concessions or benefits…to
induce the wholesaler to purchase the products and to recommend the products to,
or arrange for the purchase of the products by, customers that submit claims to
the Federal health care programs.” Moreover, “incentive payments” made to group
purchasing organizations may also put manufacturers in hot water.
Discounts are OK if:
But according to the guidelines, “Other kinds of price concessions –
including discounts on other products, other free or reduced-price goods or
services, ‘educational’ or other grants, ‘conversion payments,’ signing
bonuses, or ‘up-front rebates’) do not qualify for the discount exception and
should be carefully reviewed.
“Arrangements involving…non-price terms should be evaluated on a
case-by-case basis. Arrangements that may increase the risk of
overutilization, higher government program costs, inappropriate steering of
Federal health care business, or unfair competition are particularly suspect.”
Checklist
The OIG advises vendors to review all arrangements with the following
issues in mind:
IMDA members and others are encouraged to give the feds their opinions about the proposed guidelines. They must be delivered to the following address no later than 5 p.m. on Dec. 2: Office of Inspector General, Department of Health and Human Services, Attention: OIG-8-CPG, Room 5246, Cohen Building, 330 Independent Avenue SW, Washington, DC 20201.
Other Best of IMDA Updates