identifying compliance issues raised by e-health transactions and strategies guy collier, esq. gadi...

Identifying Compliance Issues Raised By E-Health Transactions and Strategies

Guy Collier, Esq.

Gadi Weinreich, Esq.

Shaw Pittman

September 27, 2000

Hospital PhysicianWebsiteVendor

Patient

Supplier/Provider

Example

Laws

• Anti-Kickback Laws • Physician Self-Referral Laws • Beneficiary Inducement Laws• Patient Privacy Laws • Physician Licensure Laws• Provider Licensure Laws• Supplier Licensure Laws• State Fee Splitting Laws

PhysicianWebsiteVendor

Hospital

Hospital-Vendor-PhysicianArrangement

Analysis

• Arrangement– Hospital wants to provide websites to

affiliated physicians– Website will have hospital logo and link

to hospital website on home page– Hospital hires third party vendor to

establish/ maintain physician websites– Vendor furnishes “data mining”

services for hospital and reports results

Analysis• Potential Legal Issues

– Kickback: Payment for “referrals”• Payment = free website• Is one purpose to induce referral of

patients?• If not, why is hospital giving

physician website?• Other explanations (e.g., marketing

hospital to physician’s patients)• Exceptions/Safe Harbors: personal

services?• Nominal value issue

Analysis

– Kickback: Payment for “recommendation”• Discussed below

– Physician Self-Referral (“Stark”)• Compensation arrangement between

hospital and physician? Direct? Indirect?

• Remuneration = website• Exceptions: personal services/other?

– Patient Privacy• Data mining; reports

Physician

Supplier/Provider

Supplier/Provider-Physician Relationship

Analysis• Arrangement

– Pharmacy places banner advertisement and link on physician’s website

– Pharmacy compensates physician:• Flat fee• Traffic volume; “hits” on pharmacy

link/website• Percentage of on-line purchases (Rx

versus non-Rx)• Other

Analysis• Legal Issues

– Kickback• Payment for “referrals” (same as

above)• Payment for “recommendation”

– Recommendation = advertisement/link» Exclusivity» Size» Placement» Text» Disclaimers» AO 99-8 (Yes); AO 99-12 (No)

Analysis• Exceptions/Safe Harbors: personal

services– Fair market value– Aggregate compensation set in

advance– Volume or value– Full-time versus part-time– One-year term (termination

with/without cause)

Analysis• Risk: Four Factor Test (AO 99-8)

– Party engaged in marketing (physician versus non-practitioner/provider)

– Nature (coerciveness) of marketing (telemarketing versus newspaper advertisement)

– Item or service being marketed (specific item/service versus provider logo)

– Target audience (beneficiaries versus general public)

Analysis• Risk: Other Factors

– Is compensation tied to purchases of covered items/services

– Fixed fee versus compensation based on volume/value of hits or business generated

Analysis• Physician Self-Referral (“Stark”)

– Does supplier/provider “furnish” DHS?– Physician has “compensation

arrangement” with supplier/provider?– If physician makes a “referral,” Stark

law implicated• Exception: personal services;

other?

Physician

Patient

Supplier/Provider

Supplier/Provider-Physician- Patient Relationship

Analysis• Arrangement

– Pharmacy offers discounts (rebates, coupons, “points,”etc.) to patients who access pharmacy website through physician website and purchase items from pharmacy

Analysis• Legal Issues

– Kickback: From pharmacy to patients• Payment to induce “purchases”• What can discount, points, etc. be

used for: covered items versus non-covered items–See AO 99-12 (coupons for non-

covered items only)• Exceptions: discounts

– Kickback: From pharmacy to physician• Payment to induce “referrals”

Analysis• Beneficiary Inducement Law

– Elements• Remuneration• Knows/Should Know• “Likely to influence” beneficiary• Purchase/receive from particular

“provider, supplier, or practitioner”– Penalties

• CMP = $10,000• Exclusion

– Exceptions

Analysis– Analysis

• Points as inducement to use pharmacy– Remuneration = discount/points– Knows/Should Know = possibly– “Likely to influence” = possibly– Purchase covered items = ?

»See AO 99-12 (coupon could not be used re covered items)

– From particular “provider, supplier, or practitioner” = yes, the pharmacy

Analysis– Exceptions

» Discount» Nominal value (?)» Cash Equivalent (?)

Analysis• Points as inducement to use

physician– Remuneration = discount/points– Knows/Should Know = possibly– “Likely to influence” = possibly

» AO 99-12 (no)– Purchase covered items = yes,

physician services– From particular “provider,

supplier, or practitioner” = yes, physician

– Exceptions:

Contact Information

• Guy Collier, Esq.– (202) 663-8138– guy.collier@shawpittman.com

• Gadi Weinreich, Esq.– (202) 663-8236– gadi.weinreich@shawpittman.com