OIG Lays Out Risks for Continuing Education Funding

July 14, 2022 | By Mary Kohler

The US Department of Health and Human Services, Office of Inspector General (OIG) recently posted Advisory Opinion 22-14 (AO 22-14). AO 22-14 analyzes a health care professional’s (HCP) proposal to offer continuing education (CE) programs to local HCPs (Programs). While OIG concludes the Programs can be structured to pose sufficiently low risk under the Anti-Kickback Statute, 42 U.S.C. §1320a-7b (AKS), it finds most of the proposed funding methods present more than minimal risk. AO 22-14 provides useful insights for life science companies (Industry) that fund CE events.

Background

Requestor: An ophthalmology practice specializing in cataract and refractive surgery (Practice). Half of its surgery patients are identified by its own, employed, optometrists. The other half are referred by local optometrists.

Proposed Programs: Two annual live events that would be directed at local optometrists, and focus on treating patients who require ophthalmic surgery. Practice would design the Programs to meet state continuing education (CE) requirements, and seek CE credit from an appropriate body. Attendance would be open to optometrists in the local community without regard to whether they refer patients to Practice. Meals would be provided but spend would be minimal (bagels, coffee, pizza, etc.).

Proposed Funding: Practice proposed financing the Programs through different combinations of (1) its own funding; (2) charging attendees admission; and (3) seeking Industry support. In each instance where money is collected, Practice would absorb any shortfalls but would donate excess amounts to a local charity. This table shows the permutations of external funding, with an overview of OIG’s assessment:

Threshold Question: What Was the Nature of the Funding Arrangement Proposed?

Industry support can fall into one of two buckets. AO 22-14 does not specify which one it considered.

Does AO 22-14 contemplate an educational grant? Educational grants are donative transactions and the typical funding mechanism for independent third-party CE programs. But HCPs are not the expected recipients. Both AdvaMed and PhRMA Codes state companies should not provide donations to HCPs. As such, most manufacturers would likely deny an educational grant here.

Does AO 22-14 contemplate a sponsorship? Under a sponsorship, Industry provides funding in exchange for a “Tangible Benefit” (e.g., advertising, promotion rights, etc.). Sponsorships are more akin to a purchase. AdvaMed Code envisions a sponsorship path for HCP-run programs, but does not contemplate whether CE would be attached. It also states the funding amount must be commercially reasonable for the Tangible Benefit received. AO 22-14 refers to the proposed funding as a sponsorship but doesn’t mention an exchange of funding for a Tangible Benefit of commensurate value. In addition, Industry promotion in connection with CE could trigger accreditation or other content issues. For these reasons, the Programs seem inconsistent with sponsorship funding.

Because neither of these scenarios describes a clear case for Industry funding, AO 22-14 may have little direct impact on whether Industry would fund an independent third-party CE program.

So, Is There Anything New Here?

Yes. OIG begins by saying educational CE programs can be used as vehicles to deliver kickbacks to the HCPs involved, including organizers, faculty and attendees. While this is true, it shifts the primary focus to inducement and suggests OIG might look past a program’s educational quality in an analysis that focuses overwhelmingly on AKS. Notably, OIG later points out that Practice is not a CE provider, and suggests it would evaluate the two differently. But its starting premise still encompasses both.

OIG then assesses the Programs against five “suspect characteristics” identified in its 2020 Special Fraud Alert on Speaker Programs (SFA). These are (1) little or no substantive information is presented; (2) alcohol is available or the meal is not modest; (3) location is not conducive to information exchange; (4) speakers or attendees are selected based on purchases; and (5) speaker compensation is above fair market value or based on purchases. Despite concluding the Programs did not contain any suspect characteristics, OIG goes on to analyze the various remuneration streams to the HCPs involved and finds more than minimal risk for any arrangement where attendees did not pay an admission fee consistent with FMV for a comparable CE program.

What’s Next?

OIG’s analysis in AO 22-14 raises several questions:

1. What is the value of a CE program? OIG does not spell out where the value might lie, but let’s consider a dinner program. Clearly the meal has value. OIG, however, emphasizes that HCPs need to complete CE hours for licensure, suggesting the education and credits do too. The question is how much is CE worth? On the one hand, HCPs who attend cutting-edge conferences can expect to pay a substantial sum. But for an HCP who is merely looking to meet a deadline, free online options abound. OIG does not conduct this analysis but simply considers the CE to be part of the remuneration. This may differ from how many companies see the value of CE provided in a funded program.
   

2. What is the applicability of the SFA? OIG acknowledges the Programs are not Industry-run speaker events, but describes the overarching difference as the organizing party. It then says the SFA is instructive for analyzing the Programs. But applying the SFA to a third-party CE program is still a logical leap. Admittedly, Practice is an HCP putting on its own event, and could reap promotional benefit from showcasing its knowledge, professional capabilities and facilities to local HCPs. OIG’s assessment of the potential for Practice to receive future referrals from attendees seems to recognize this. Perhaps this made the Programs appear closer to Industry speaker programs in the agency’s eyes. But as we observed a few months ago here, there is a concern OIG may extrapolate its views from the SFA beyond the context of speaker programs to other Industry activities. AO 22-14 could be signaling a move in that direction. Stay tuned.
   

3. If the SFA is expanding, should companies increase their scrutiny of third-party educational events? Maybe. AO 22-14 is limited to its facts. But it would be wise to watch these issues. Most manufacturers already analyze third-party events closely, and can deny funding for a variety of reasons, including content issues, excessive speaker fees, extravagant meals, etc. But they might not consider their relationship with a CE speaker in the funding decision. It’s also doubtful anyone scrutinizes whether alcohol will be served. Interestingly, by clicking down to the value an attendee receives at an independent event, OIG’s combination “SFA plus remuneration” construct may start to unravel. For example, if OIG wants attendees to pay FMV admission for CE programs across the board, event details may become a pass-through cost. If so, wouldn’t meal cost become irrelevant?

Conclusion

Although not aimed directly at Industry, AO 22-14 offers a window into OIG’s thinking about Industry-funded CE. Funding proposals are unique and often require thoughtful analysis by staff. And this analysis can become complicated when requesters, like perhaps Practice here, do not fully grasp the analytic framework of educational grants and sponsorships. As OIG continues to delve into AKS matters touching on Industry, companies may want to revisit their external funding processes to ensure policies, controls, training and oversight reflect the agency’s evolving thinking.

© 2022 Kohler Health Law, PC. This article does not contain legal advice. Readers should consult an attorney to analyze issues related to their particular circumstances. Some jurisdictions may consider this article attorney advertising.