OIG Advisory Opinion 08-05

From the American Health Lawyers Association (www.healthlawyers.org):

Summary of OIG Advisory Opinion 08-05
Issued February 15, 2008, and posted February 22, 2008
Written by Cathy Martin, Reviewed by Claire Turcotte*

Advisory Opinion 08-05 provides us with another instance where the OIG has concluded that the anti-kickback statute is not implicated. The proposed arrangement involves a pharmaceutical company's proposal
to place electronic kiosks that offer free disease state screening questionnaires in physicians' offices, similar to the informational pamphlets currently found in the waiting rooms of physicians' offices.

The OIG concluded that the anti-kickback statute was not implicated because the kiosks had no independent value to the patients or the physicians and therefore, did not generate any remuneration for them. For similar reasons, the OIG concluded that the proposed arrangement would not be subject to sanctions under the civil monetary penalties (CMP) provision addressing inducements to a Medicare beneficiary to choose a particular provider.

The requestor is a pharmaceutical and healthcare company that develops, manufactures, and markets drugs for a number of diseases and conditions, that are reimbursable by the Federal healthcare programs. Under the proposed arrangement, the requestor would place a freestanding electronic kiosk in the physicians' waiting rooms at no charge to the physician. Included with the kiosk would be a touch screen, keyboard, printer, and software. The purpose of the kiosk would be to allow patients to complete questionnaires about particular disease states, print-out their responses, and share the results with their physicians. The use of the kiosks would be voluntary and neither the kiosks nor the printouts would draw any conclusions as to the patients' condition or recommended therapy, nor would it provide a message to the patients' physicians.

Importantly, the questionnaires would not mention the requestor's drug products or contain advertisements, coupons, or offers of free items. The kiosks and printed materials would include a small image of the requestor's logo, a "brought to you by" statement, and a copyright notice. While the kiosk would capture general information about the utilization of the kiosk (i.e., number of participants completing the questionnaire, printing out the results, etc.), the requestor certified that the kiosk would meet all applicable privacy laws and that the information captured would not be available to the requestor's sales representatives.

The OIG assessed the risk that the proposed arrangement could serve as an inducement to patients to self-refer to the requestor's drugs and/or as an inducement to physicians to prescribe the requestor's drugs. With respect to the patients, the OIG concluded that kiosks, in the absence of coupons, offers of free items, or other remuneration, did not provide anything of value to the patients and therefore, did not implicate the anti-kickback statute. Nevertheless, the OIG reiterated its long-standing concern with direct to consumer advertising and the potential for such advertising to result in over utilization and increased costs to patients and the Federal healthcare programs. The OIG also noted that the proposed arrangement potentially implicates and could violate other Federal laws (Federal and state consumer protection laws, FDA or FTC regulations), which are beyond the scope of the advisory opinion process.

With respect to the physicians, the OIG reached a similar conclusion. The kiosks would not generate prohibited remuneration for the following reasons: the kiosks would remain the property of the requestor, the physicians would host the kiosks but not receive any space rental or utility fees or other compensation, the kiosks were not viewed as saving the physicians or their staff any appreciable time, and the kiosks did not increase the attractiveness of the physicians to patients. The OIG concluded that the limited purpose of the kiosks amounted to "little more than high-tech interactive brochures" with no independent value to the physicians. The OIG distinguished the kiosks from other multi-functional computers or fax machines that do have independent value to a physician and may constitute an inducement to the physician. Finally, the OIG noted that the proposed arrangement included sufficient safeguards to protect patient privacy.

*The Practice Group Leadership would like to thank Advisory Opinions Task Force members Cathy Martin (Alston & Bird, Washington, D.C.) and Claire Turcotte (Bricker & Eckler, Cincinnati-Dayton, OH) for respectively writing and reviewing this summary.