The United States healthcare industry poses an infinite number of risks when it comes to interactions with healthcare professionals.  Given the aggressive regulation and enforcement of prohibitions against kickbacks and referrals, healthcare companies have to devote significant resources and strategies governing interactions with physicians.

First, healthcare provides, pharmaceutical and medical device companies have a variety of legitimate reasons for relationships with physicians.  They work closely together to deliver healthcare services, drugs and medical devices.  I know this is another profound grasp of the obvious but bear with me.

Second, healthcare providers employ or retain physicians to provide physicians.  Hospitals and other providers have to guard against providing benefits to physicians in order to induce them to deliver services, and they have to avoid creating improper referral arrangements.  Healthcare providers cannot foster or promote improper benefits by giving physicians below-market offices, facilities or other arrangements as improper inducements.  Violations of the anti-kickback and Stark laws create False Claims Act prosecution and whistleblower risks.

Third, pharmaceutical and medical device companies interact with physicians as the ultimate customer for drugs and devices.  In this respect, drug and device companies rely on physicians to assist in research, consulting and educational services needed to inform other physicians and healthcare representatives on the benefits of drugs and devices.  Drug and device companies have legitimate reasons to engage physicians but there is plenty of room for companies to use these vehicles to funnel improper benefits to illegally induce physicians in violation of anti-kickback laws.

These risky interactions extend into a number of other areas – meals, gifts, entertainment, hospitality, medical education, dinners and lectures.  The government’s aggressive enforcement programs, along with industry codes, have pushed back against drug and device companies using these vehicles to make illegal payments to physicians and healthcare officials.  Notwithstanding this trend, drug and device companies continue to be prosecuted (civil and criminal) for elaborate kickback schemes involving illegal benefits to physicians for non-existent services.

The number and extent of transfers by healthcare providers, and drug and device companies to physicians and healthcare officials create incredible risks and challenges.  A compliance program has to be designed to distinguish between legitimate and improper payments to healthcare professionals.

Like any other area of compliance, companies have to design and implement robust controls to protect against improper payments to healthcare professionals.  It is an incredibly difficult task.

Healthcare companies have to follow the usual formula – conduct a risk assessment, design and implement appropriate controls, monitor and measure compliance, and conduct proactive auditing.  For healthcare companies, a robust auditing program is critical to identify potential risks.  Often, this requires healthcare companies to rely on sampling techniques. 

If a healthcare company fails to implement an effective compliance program, there are so many risks and ways that money and other benefits can be improperly transferred to physicians.  The line between proper and improper benefits is subtle but with significant consequences.  Healthcare compliance professionals have an overwhelming task and are often playing catch up.  In many cases, healthcare compliance officers are reacting to potential problems.  Proactive measures are often a hope and reality is difficult.

That is not to say that healthcare companies cannot implement an effective program.  There are numerous sources of guidance – Health and human Services has issued a variety of publications and Corporate Integrity Agreements have provided important “best practice” strategies for companies that face serious risks.

The healthcare compliance field has been a leader in compliance strategies and techniques.  As regulated companies (e.g. Medicare and Medicaid), healthcare companies have implemented strategies that have advanced compliance programs in other industries.