OIG speaks out on funding for continuing education programs | Holland & Knight LLP


The Office of Inspector General (OIG) of the United States Department of Health and Human Services recently issued Advisory Opinion 22-14, in which it analyzes an ophthalmology practice’s proposal to offer Continuing Education (CE) to local optometrists (“Proposed Arrangement”) under the context of the Federal Anti-Kickback Act (“AKS”). By issuing a partially favorable opinion as detailed below, the OIG has shed additional light on the concepts of free or reduced cost goods or services and “substantial independent value” under the AKS.

The opinion of the BIG

Under the proposed arrangement, an ophthalmology practice (applicant) would provide continuing education programs to local optometrists that would address new technologies and pharmacology practice treatment protocols related to ophthalmic surgeries. The applicant has requested an advisory opinion on the proposed arrangement, with four potential methods of funding CE programs:

  1. Under Arrangement A, the plaintiff would charge all participants an enrollment fee consistent with the fair market value of these continuing education programs. Collection of such enrollment fees would be consistent with the overall estimated cost of the CE program, so any shortfall or excess revenue would not be material. The claimant would cover any shortfall while donating any excess income to a local charity.
  1. Under Arrangement B, the applicant would cover the full cost of continuing education programs, with no registration fees charged to participants.
  1. Under Arrangement C, the applicant would 1) charge no registration fees to participants, but 2) seek funding from industry sponsors (e.g., medical device and pharmaceutical companies). If sponsor funding results in a shortfall, the applicant will cover the difference, and if funding results in an overspending, these amounts will be donated to a local charity.
  1. Under arrangement D, the applicant would 1) charge a registration fee to participants and 2) seek funding from industry sponsors (e.g., medical device and pharmaceutical companies). Again, if income from entry fees and sponsors results in a shortfall, the applicant will cover the difference and, if they result in a surplus, these amounts will be donated to a local charity.

The OIG analyzed each proposed arrangement separately under the AKS. Specifically, the OIG analyzed whether any of the four proposed arrangements involved problematic compensation 1) for the claimant, who may be a referral source for industry sponsors, and/or 2) for the participants, who may also be able to refer federal health care recipients to the applicant or prescriber, or order industry sponsors’ products (eg, drugs and medical devices). The OIG issued a favorable opinion on Arrangement A but expressed concerns regarding Arrangements B, C and D as follows:

  1. The OIG felt that Arrangement A posed a sufficiently low level of risk under the AKS, as registration fees would be charged to participants and no industry sponsors would fund the program. Although the registration fee may nevertheless require the claimant to cover any shortfall, such amounts would not be substantial. That is, the OIG appears to be stating that because the value of any compensation from the claimant to the participants, if any, would not be substantial, the risk of fraud and abuse is low enough, particularly when CE programs had other low risks (detailed below).
  1. The OIG felt that Arrangement B posed more than minimal risk of fraud and abuse, as the CE program would be completely free to all local optometrists who might be able to refer cases from the federal health care program. health to the applicant. The OIG stated that because the free goods or services in question (i.e., the provision of free continuing education programs) conferred independent value on optometrists, it may incentivize optometrists to refer surgical patients towards the requester, which could lead to inappropriate referral of patients.
  1. The OIG also felt that Arrangement C posed more than minimal risk because 1) as in Arrangement B described above, the continuing education program would be completely free to all local optometrists, but also 2) sponsorship of these continuing education programs by industry sponsors, such as manufacturers of medical devices or pharmaceuticals, may induce the applicant and participants to prescribe or order a sponsoring company’s products, including those reimbursable by a federal health care program.
  1. Finally, the OIG also found that Arrangement D posed more than minimal risk, because although participants would be charged an enrollment fee, continuing education programs would still be sponsored by industry sponsors. , saving the applicant from paying all the expenses that the applicant would otherwise incur. . Because the plaintiff is able to prescribe or order the sponsor company’s products, the OIG said it could not conclude that the arrangement would present a sufficiently low risk of fraud and abuse.

Key points to remember

The OIG has long used the concept of “substantial independent value” to assess whether the provision of free or reduced-cost goods or services to a potential referral source of federal health care program activities poses increased risks in the framework of the AKS. In Advisory Opinion 22-14, the OIG again applied the same concept in the context of free educational programs, showing that even genuine educational programs could present increased risks of fraud and abuse.

However, the OIG’s dissenting opinions on Arrangement A versus Arrangements B, C and D show that an analysis under the AKS is truly an analysis of facts and circumstances, involving a detailed examination of each arrangement. proposed, the type and amount of “compensation” involved and the parties involved in the arrangement.

It is important to note that in its favorable opinion on Arrangement A, the OIG analyzed the proposed arrangement knowing that the CE programs did not involve any of the suspect features that the OIG has traditionally viewed as problematic. For example, the OIG noted that 1) the CE program had real and relevant background information on patient treatment, 2) only modest foods (e.g., bagels, coffee, pizza, etc.) would be provided to participants, and 3) the continuing education program would take place in an appropriate location conducive to educational presentations, without entertainment or recreational events. Further, the OIG noted that the CE program would not target any particular optometrist, such as large prescribers of industry sponsor products or those who have historically referred patients to the applicant.

Physicians, prescribers, manufacturers, and other stakeholders should be aware that the provision of free or reduced-cost goods or services may involve AKS, even when provided through educational programs. Each arrangement should be carefully analyzed, taking into account the specific facts and circumstances to determine the associated risk.


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