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Lawyer Warns Medical Device Companies on Lab Payments

Medical device companies should take note of a new special fraud alert on laboratory payments to referring doctors.

July 7, 2014

2 Min Read
Lawyer Warns Medical Device Companies on Lab Payments

Washington attorney Alan Kirschenbaum (Hyman, Phelps & McNamara) says drug and medical device companies should be aware of an HHS Inspector General Special Fraud Alert on laboratory payments to referring doctors.

Writing in his firm’s FDA Law Blog, Kirschenbaum says the alert “contains strong warnings that even registries with a public health benefit are not immune from prosecution under the federal healthcare program antikickback law, if the registry is intended as a vehicle to reward or induce referrals.”

The article quotes the OIG as saying that “claims that registries are intended to promote and support clinical research and treatment are not sufficient to disprove unlawful intent.”

The alert identifies a number of suspect registry characteristics that may be evidence of unlawful purpose, some of which Kirschenbaum says can be extrapolated to drug or device registries:

  • The registry sponsor requires that doctors conduct a certain number of procedures to obtain compensation.

  • Compensation is on a per-patient or other basis that takes into account value or volume of referrals.

  • Compensation is greater than fair market value for the doctors’ efforts in collecting and reporting patient data.

  • The participating doctors’ efforts are not supported by timely submitted documentation.

  • The registry collects data only on the registry sponsor’s own product.

  • Participants are selected based on their prior or anticipated referral volume.

The analysis says that for drug and device manufacturers who conduct registries that have been required or requested by FDA, the OIG’s warnings should ordinarily not be of concern.

But manufacturers conducting other registries should read the alert and take note that even a well-designed registry that generates useful scientific or treatment data may be at risk if there is evidence of a marketing motivation, it says.

—Jim Dickinson is MD+DI's contributing editor. 


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