While enforcement under the False Claims Act and Anti-Kickback Statute traditionally focused on billing practices, regulators now scrutinize routine business practices such as marketing, vendor relationships, and operational tasks—especially when tied to government benefits. Nicki Jacobsen, Director, Stout, and Astrid Monroig, Associate, Barnes & Thornburg, discuss two recent federal settlements involving speaker programs and the misuse of government postage discounts. They explore the key compliance risks and takeaways for health care organizations, along with broader enforcement trends. Sponsored by Stout.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
Welcome to AHLA's Speaking
SPEAKER_01 (00:19):
of Health Law.
podcast series.
I'm Astrid Monroy, healthcareattorney at Barnes and
Thornburg.
Today, we'll explore two recentfederal enforcement actions that
serve as timely reminders forprofessionals across many areas
of the healthcare space.
SPEAKER_02 (00:37):
Thank you, Astrid.
Good afternoon.
My name is Nikki Jacobson.
I am a director at Stout, whichis a global advisory firm
specializing in corporatefinance, accounting and
transaction advisory, valuation,financial disputes, claims, and
investigations.
I specifically work with thehealthcare valuation group and
(00:58):
specialize in providercompensation arrangements.
I have been doing this for over11 years.
I was previously a part ofhealthcare appraisers before we
became part of Stout.
It is great to be herediscussing these important
issues that serve as remindersin these F&B-related
anti-kickback and False ClaimsAct settlements to determine
(01:20):
some best practices.
SPEAKER_01 (01:22):
Thank you, Nikki.
Today's discussion highlightsthe government's ongoing
scrutiny of financialrelationships in healthcare and
the compliance risks that canarise from what could seem as
routine business practices.
Improper use of speaker programsto influence prescriber decision
(01:44):
and inaccurate certifications toobtain government benefits are
just a few examples of conductthat may trigger enforcement
under the False Claims Act orthe anti-kickback statute.
These actions underscore theimportance of maintaining
transparency and accuracy in allaspects of operations.
(02:06):
As even administrative misstepscan raise significant legal
concerns when they impactfederal funded programs.
SPEAKER_02 (02:16):
Yeah, and before we jump into our conversation, I
just want to point out, and Iknow everybody knows this, that
these are the views of Astridand myself.
They're not necessarily theviews of AHLA, Stout, or Barnes
and Thornburg.
So yeah, do you want to talk usinto the first settlement?
SPEAKER_01 (02:34):
Absolutely.
Let's dive in and break downwhat these recent settlements
and enforcement actionshighlight.
Why familiar practices likespeaker events and vendor
relationships continue to raiseflags, and what healthcare
organizations can do to stayahead of enforcement risk,
especially when oversight,documentation, or intent isn't
(02:58):
clearly established.
Promotional speaker programsremain an area of close
government scrutiny,particularly when there are
questions about whether theyserve a legitimate educational
purpose or create the appearanceof rewarding prescribing
behavior.
Regulators tend to look closelyat how often the same attendees
(03:21):
participate in events withrepeated content, whether there
is high-end venues, the depth ofclinical exchange, and whether
honoraria, meals, or expensesare reasonable.
These factors can raisecompliance concerns, even if the
programs were intended to informor were well intended.
(03:45):
Under the anti-kickback statute,financial arrangements that
appear to influence referralsfor federally reimbursed
services can trigger liability.
even when the intent, again, isnot explicitly improper.
That's why compliance teamsshould take a close look, and
that's our main advice for ourtalk today.
(04:05):
Not just on whether theirorganization's speaker programs
is permissible or not, but onhow they're designed and
implemented.
And there are some practicalquestions that we were thinking
about and would like to sharewith the audience.
Are the topics meaningful andclinically relevant?
(04:26):
So these are questions that ouraudience can use to practically
evaluate and assess theircompliance program when it comes
to speaking arrangements thatinvolve physicians.
Another question would be, arespeakers selected based on their
expertise and are fees supportedby fair market value
(04:47):
documentation?
Does the setting and audiencereflect the program's
educational intent?
Asking, I think, this type ofquestions can help strengthen
the internal review process,reinforce program integrity, and
reduce the risk of becoming thecenter of an enforcement action.
(05:08):
And we'll discuss those in aminute.
SPEAKER_02 (05:11):
Yeah, I agree.
Nobody wants to be the center ofthese enforcement actions.
Yeah, in any arrangement thatwe're asked to look at and
provide an opinion of commercialreasonableness and or fair
market value, the first thingwe're going to look at is what
are the services being rendered?
Are those the type of servicesthat would require or even
(05:36):
warrant any type of payment oradditional compensation.
And when I say compensation, I'mnot tying it specifically to,
you know, a normal paycheck cashcompensation, but, you know,
that would include travelreimbursement, lodging, meals,
you know, anything that you'rereceiving in exchange for either
attending a program or speakingat a program.
(05:58):
So in this specific arrangementand settlement, there were a
number of red flags.
First one, of course, being thatthese speakers were large high
prescribing physicians alreadyvery highly involved with this
specific pharmaceutical company.
(06:18):
And these speakers were itappears that these speakers may
have been chosen because of thathigh prescribing nature.
And then they were chosen totravel to these desirable
locations across the U.S.
to speak at the events.
And they were even able tosuggest different locations to
hold these events at.
(06:39):
And then just another thing onthe speaker front, the speakers
themselves didn't have toprepare anything.
Everything was already preparedand handled prior to their
involvement.
Another kind of issue in thisspecific arrangement was the
selection of the event locale.
(07:02):
And maybe not all of them, butsome of them were held at very
high-end restaurants, multiplecourse dinners, drink pairings,
things along those lines thatyou don't necessarily associate
with an educational program.
Lastly, I'd say that the thirdkind of big issue was with the
attendee list.
(07:22):
Multiple times physicians wereattending the same event on the
same exact health topic.
So just all of those factscombined made this a problematic
arrangement.
And it made it look like maybethese physicians were selected
to participate for the wrongreasons.
(07:46):
This case specifically, I think,shows the necessity of looking
at what's happening in theentirety.
Because having a physician speakin an event and providing some
sort of travel or compensationmay not be problematic.
Having an educational lunchwhere you have physicians
(08:08):
attending and sitting through apresentation Again, that may be
just a normal everydayoccurrence.
It's when all of these factshappened at the same time that
it became problematic.
So I think that's what'simportant to remember for that
first settlement.
(08:29):
The second settlement we'regoing to discuss is one I find
extremely interesting because Ilive in a provider compensation
bubble, if you will.
So I have never experienced thisissue firsthand.
Do you wanna break down thefacts of that one?
Yes,
SPEAKER_01 (08:44):
absolutely.
In the second enforcement actionthat we want to share today, It
surrounds a healthcarepublishing company.
And this healthcare publishingcompany recently agreed to pay a
seven-figure settlement toresolve allegations that it
misrepresented how many peoplehad actually requested its
(09:05):
publications in order to qualifyfor discounted postage rate.
All right, so what does thatmean?
Well, the core issue in thiscase was the government offers
discounted postage rate forcertain publications.
But the rule is that more thanhalf of the recipients have to
(09:28):
specifically request to receivethe publication in order for the
publishing company to have thatright to the discounted postage
rate.
What happens is the companyallegedly claimed the lower
rate, even though many of thenames the entity provided were
(09:49):
mailing lists that wereoutdated, records from
third-party sources that did notreally qualify under the rules.
As a result, the companyunderpaid postage rates, which
means the company, by doingthis, saved money.
A whistleblower reported theissue and in the resulting
(10:13):
settlement, the company agreedto pay restitution and the
whistleblower received a shareof the recovery and
reimbursement for legal costs.
This case, I think, serves as areminder that even everyday
business practices like mailingpublications can trigger
enforcement actions whencompanies may misrepresent key
(10:36):
facts.
And it's interesting here, theconcern wasn't about what the
company was mailing, the actualproduct.
What happened here is thatbecause the company represented
the mailing activity, the waythe company represented the
mailing activity to the U.S.
Postal Service in order toaccess this government benefit,
(10:57):
that was the issue.
Not what they were chipping, butthe fact that they provided
mailing lists with names ofclients that they didn't have in
order to access this savings,this federal government benefit.
And this led to improper costsavings, which triggers the Full
(11:19):
Claims Act.
I think the takeaway here isthat even operational steps like
shipping or mailing, especiallywhen tied to like certifications
or discounted government rates,should be reviewed through a
compliance lens.
Government enforcement isn'tlimited to healthcare billing.
(11:40):
It extends to any area wherefederal benefits are or there
are federal benefit programs orprograms any sort of federal
funded program.
Misclassifying routine businessexpenses, like in this case,
postage rates, can lead toliability under the False Claims
(12:01):
Act if government rates or fundsare involved.
And I think that is the takeawayof this case, that it's very
interesting and we don't see itevery day.
SPEAKER_02 (12:13):
Yeah, I agree.
Those are all great points.
This settlement definitely showsthat the government is kind of
looking outside the box toconsider any and all violations
of the False Claim Act and thatthey definitely come in
different shapes and sizes.
That's why it's important toinvolve your internal compliance
team or people as well as yourlegal team.
(12:34):
anytime that a governmentbenefit is being accessed, just
to ensure that you are checkingall of the correct boxes.
So now that we've kind ofdiscussed the meat of these two
settlements, as legal counsel,what are some of the main
conclusions that you've drawn?
SPEAKER_01 (12:51):
Yes, one of the biggest takeaways from these
recent cases is how significantthe False Claims Act has
expanded in its practicalapplication.
This year, 2025, we're seeingenforcement extend well beyond
traditional billionaires orupcoding, which is what we would
more traditionally see triggerFalse Claims Act issues.
(13:12):
But here, that wasn't the case.
The government applied FalseClaims Act liability theories to
marketing practices,administrative
misclassifications, and vendorrelationships, areas that once
were viewed at face value asroutine business practices or
(13:33):
operational decisions ratherthan carrying legal risk.
For example, take the speakerprogram settlement that we were
talking about earlier.
The government in that caseargued that the company was
trying to influence prescribingby holding repeated events, like
you mentioned, with the samecontent and inviting high
(13:56):
prescribing providers.
These patterns were used tosuggest that the programs
weren't just educational.
They were educational.
actually designed to drive offfederally reimbursed
prescriptions, turning a commonmarketing strategy into a
potential legal issue.
(14:17):
In the second case, somethingthat might have been seen like a
simple mailing issue usingdiscounting postage rates became
a False Claims Act matter.
The problem in these two caseswasn't clinical at first.
at all.
It came down to how the companyclassified its mailing when
(14:40):
dealing with the U.S.
Postal Service or how thespeaking arrangements were
designed.
But in both cases, thegovernment lost money and that
misstep opened the door toliability under, for one, the
False Claims Act, for the other,the anti-kickback statute.
What is the big picture message?
(15:03):
The government is looking beyondbilling codes, errors, and
claims data.
It's looking on intent,financial impact, how business
practices, whether marketing,operations, or administrative
tasks can affect federalprograms.
What before was seen as notcarrying as much legal risk,
(15:28):
these two cases actually portraya different story and they show
how These areas, marketing,operations, simple day-to-day
business tasks can triggerliability.
SPEAKER_02 (15:44):
Yeah, I agree.
I feel like there may be alittle bit of a shift happening
that just requires the need toassess this risk across a wider
range of activities than maybewhat you previously were focused
in on.
Some questions that come to mindto ask would be, are your
(16:05):
marketing practices tied tometrics that could suggest
volume-based inducement?
Can you document the servicesthat are being rendered in
exchange for for thecompensation paid?
Are you paying the samephysician multiple times for the
same services.
So why are your third partyvendors making certifications on
(16:26):
your behalf?
As you are well aware, as wellas our listeners are probably
aware, it's your responsibilityto ensure that your
certifications are accurate,especially if you're receiving
any type of government benefit.
It's important to take thatextra time to ensure that your
(16:46):
arrangements, yourcertifications, any
classifications are accurate toavoid issues like these.
What are some other issues thatyou think could help prevent
these types of situations?
SPEAKER_01 (17:00):
Yes.
Another takeaway is the role ofinternal reporting.
In both cases, governmentscrutiny began with insiders.
either through whistlebloweractions or people that flag
during internal audit issues.
(17:21):
I think this underscores theneed for more than just a
hotline on paper.
Organizations must foster aculture where employees feel
they can raise concerns and seethat those concerns are taken
seriously.
I think addressing issues earlycan make the difference between
internal resolution and externalenforcement.
(17:43):
And I think the larger questiongoes to goes beyond to beyond
are we billing correctly orcould any part of our
operations, even those unrelatedto billing, be seen as
misleading, overly aggressive,causing loss to a federal
program.
Then these questions when askedregularly inside the
(18:06):
organization can be a good wayto assess risk ahead of time.
For example, False Claims Actenforcement today is as much
about perception and structureas it is about claims.
When internal controls fail tocatch risky patterns, that's
(18:27):
where real exposure begins.
SPEAKER_02 (18:31):
Yeah, I agree.
And I think one of the easiestways to ensure you're protected,
and I know the audience isprobably already sick of hearing
us say it, is just to involveyour internal compliance, your
legal counsel, when necessary,external third-party counsel.
consultants who were able toreview the details of your
specific arrangements and helpidentify the possible risks.
(18:55):
And I think it's important toinvolve additional people in
these situations because they'reable to see a different picture
than somebody who has been veryfocused on getting the
arrangement across the finishline to start with.
So having more of a team lookthrough what's going on, they
(19:16):
may be able to something thatyou have not yet noticed, and
that'll help you remaincompliant.
So with all of this, what do youthink this means for future
enforcement?
Do you anticipate maybe a shiftin focus, more of the same?
I
SPEAKER_01 (19:33):
think something...
I think it's important to bringup at this point around those
lines is that there's a strongpush for voluntary
self-disclosure.
And I think we're going to seemore of that.
I think the government, ofcourse, would prefer a voluntary
(19:55):
self-disclosure policy.
instead of an enforcementaction.
Now, it's not alwaysrecommended, and I don't think
it's for every single case.
There are certainly certainoccasions for which a voluntary
self-disclosure should begranted.
And then there are some othersituations in which it may not
(20:18):
be the most practical way Ithink organizations that
identify and address problemsinternally tend to receive
credit, and that's veryimportant in a self-disclosure.
Those entities thatself-disclose do have a benefit,
which is that credit that thegovernment tends to give to
(20:40):
people that are forefront.
I also think delayed action orconcealment, on the other hand,
can increase penalties andreputational harm, and it's not
good either.
I think the entity asked to havea strong compliance program to
find that happy medium and tohave a standardized way to
(21:06):
assess whether illegal issue orcompliance issue amounts to a
self-disclosure or can becorrected before there is
liability or implications withthe anti-kickback statute or the
false claims act, which is thetwo statutes that we're talking
(21:26):
about today.
I think this is also a goodmoment in our conversation to
remind leadership teams andhealthcare entities to revisit
high-risk areas.
We talked about speaker programsat the beginning.
Now with these two cases, we'reseeing also marketing
(21:47):
partnerships are being lookedat, vendor contracted services.
I think legal compliance teamshould ensure that there is a
seat at the table for thebusiness people that are
carrying forward many of thesecontracts and business practices
(22:12):
to together design and executebusiness arrangements.
SPEAKER_02 (22:18):
Yeah, that's a great point.
As we are all very well aware,this world that we operate in is
definitely not aone-size-fits-all world.
So to the extent you're lookingat an arrangement that may come
under scrutiny, which thispretty widespread at this point,
(22:39):
just to be sure that you'redocumenting any specific facts
and circumstances that you'rerelying on to make your design
decisions, your executiondecisions.
For example, if you're paying aphysician to speak at an event,
some questions you may want toask yourself are, why do you
(23:02):
need a physician to participate?
Is that need...
in existence to start with.
Assuming you do, what makes thephysician you chose right for
the job?
Is there special qualificationsor background or experiences
that make that physician theright physician for the job?
(23:23):
Then you wanna dig into where isthis being held?
Is this event local to thephysician you've chosen?
If not, can you determine thatthe physician you would have to
compensate to travel to a newlocation is better suited for
this opportunity than maybe alocal physician who's already in
(23:44):
that city and does similar work.
Then I think lastly, you want tolook at what the physician's
actually doing.
Is the physician preparing aslide deck and a speech?
Is the physician presentingsomething that's been prepared
for them previously just whatare you asking that physician to
(24:09):
do?
Obviously not an exclusive listand we'll have different
questions depending on the factsand circumstances of your
specific arrangement.
But those are the types ofquestions that you'll want to
have answers.
To me, that bottom line reallyis the simple, basic questions.
(24:30):
Who can provide these services?
What unique services are beingprovided?
Where are they being provided?
When are they being provided?
And of course, I think maybe oneof the more important ones, why
is it necessary?
So I think it's fair to saythere's no end in sight for
these types of allegations andactions.
(24:52):
And since we still have a littlebit of time to keep chatting,
kind of shift gears slightly tosome of the things that could
have been done in thesesituations or others that you
may be thinking of to helprecognize potential issues
before the government isinvolved.
So for example, in thepharmaceutical case, Had
(25:17):
somebody been monitoring theinvite list to make sure that
the same attendees and speakersweren't going to the same
sessions, that could have helpedmitigate some of the risk.
Making sure you're choosing alocation that supports the type
of event that you're claiming tohave would have been helpful.
(25:42):
And I think in that specificsettlement, there were a number
of different people organizingand inviting and maybe having a
centralized, I don't know,database of sorts to monitor
what was actually going onacross the country would have
been helpful.
And of course, includingphysicians who maybe are not
(26:02):
your highest prescribingphysicians certainly seems to be
another big issue with that one.
So with regards to the secondsettlement we discussed with the
postage or even in general, isthere anything you would
suggest?
SPEAKER_01 (26:18):
Yes, absolutely.
And I agree with your takeaways100% on speaker fees and
speaking arrangements.
On the other settlement casethat we were talking about,
about the postage ratesdiscount, I would say that it's
important for legal slashcompliance teams to to require
(26:43):
some sort of sign-off for vendorcertifications tied to federal
benefits.
And let me give you a practicalexample of what I mean.
If a vendor is claiming reducedpostal rates or program
eligibility, I think the entitywho is also involved in the
(27:04):
arrangement should ensuredocumentation supports that
classification.
I...
would say don't let operationsor marketing teams submit
certifications in isolationrather provide them with a
practical way for them toidentify ahead of time certain
(27:29):
areas that could even representliability or trigger issues.
I would say also for theaudience listening, formalizing
escalation paths to yourreporting structure.
What may be less risky to whatis more risky and have some sort
(27:54):
of structure that helps businessteams to identify risk because
Compliance and legal teams willnot always be when some of the
decisions are taken,particularly when the decisions
are small or day-to-day businessroutine practices, but we are
(28:16):
seeing how those can carryenforcement as the case we were
just discussing with the postagerates discounts and the
seven-figure settlement thatended up being.
I would also say that thefulfillment, logistics, supply
(28:40):
chain teams should be trainingcompliance.
Most entities do it.
But the training, I think,should be robust in those areas,
particularly as we're seeing inthis case with the US Postal
Service settlement in which theentity misrepresented their
(29:01):
client base in order to reach acertain threshold that
eventually saved them money inthe scheme.
I think it's important thatSupply chain, fulfillment,
logistic things are trainedheavily in compliance because
(29:21):
they take routine businessdecisions every day that don't
always get to the level of legalreview or sign-on and can't
carry.
compliance risk under the FalseClaims Act, as we're seeing with
this case.
I would also say that leadersshould walk them through real
(29:44):
world examples, just like youand I are doing right now.
These enforcement actions arehelpful for business people to
see how a small routine businesspractice can carry liability and
(30:04):
can also carry enforcement fromthe government.
SPEAKER_02 (30:10):
Yeah, I agree.
Those are all great suggestions.
And I think specifically withthose real world examples, so
many times you have peopleeither new to a role or maybe
even new to your business thatjust aren't aware of the impact
that the decisions that they'remaking every day may have on
(30:32):
your business liability on theback end.
So I think that that's alwayshelpful.
The more you know So I thinkthat's all we wanted to cover
today.
So thank you so much for joiningme, Astrid, and to the audience
for listening to us.
It was great discussing thesesettlements with you.
SPEAKER_01 (30:55):
Thank you.
It was my absolute pleasure.
And that concludes today'sepisode of Speaking of Health
Law.
The compliance lessons fromthese recent settlements are
clear.
Intent, documentation, andoversight matter.
Thank you.
SPEAKER_00 (31:15):
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(31:35):
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you
Welcome to AHLA's Speaking
SPEAKER_01 (00:19):
of Health Law.
podcast series.
I'm Astrid Monroy, healthcareattorney at Barnes and
Thornburg.
Today, we'll explore two recentfederal enforcement actions that
serve as timely reminders forprofessionals across many areas
of the healthcare space.
SPEAKER_02 (00:37):
Thank you, Astrid.
Good afternoon.
My name is Nikki Jacobson.
I am a director at Stout, whichis a global advisory firm
specializing in corporatefinance, accounting and
transaction advisory, valuation,financial disputes, claims, and
investigations.
I specifically work with thehealthcare valuation group and
(00:58):
specialize in providercompensation arrangements.
I have been doing this for over11 years.
I was previously a part ofhealthcare appraisers before we
became part of Stout.
It is great to be herediscussing these important
issues that serve as remindersin these F&B-related
anti-kickback and False ClaimsAct settlements to determine
(01:20):
some best practices.
SPEAKER_01 (01:22):
Thank you, Nikki.
Today's discussion highlightsthe government's ongoing
scrutiny of financialrelationships in healthcare and
the compliance risks that canarise from what could seem as
routine business practices.
Improper use of speaker programsto influence prescriber decision
(01:44):
and inaccurate certifications toobtain government benefits are
just a few examples of conductthat may trigger enforcement
under the False Claims Act orthe anti-kickback statute.
These actions underscore theimportance of maintaining
transparency and accuracy in allaspects of operations.
(02:06):
As even administrative misstepscan raise significant legal
concerns when they impactfederal funded programs.
SPEAKER_02 (02:16):
Yeah, and before we jump into our conversation, I
just want to point out, and Iknow everybody knows this, that
these are the views of Astridand myself.
They're not necessarily theviews of AHLA, Stout, or Barnes
and Thornburg.
So yeah, do you want to talk usinto the first settlement?
SPEAKER_01 (02:34):
Absolutely.
Let's dive in and break downwhat these recent settlements
and enforcement actionshighlight.
Why familiar practices likespeaker events and vendor
relationships continue to raiseflags, and what healthcare
organizations can do to stayahead of enforcement risk,
especially when oversight,documentation, or intent isn't
(02:58):
clearly established.
Promotional speaker programsremain an area of close
government scrutiny,particularly when there are
questions about whether theyserve a legitimate educational
purpose or create the appearanceof rewarding prescribing
behavior.
Regulators tend to look closelyat how often the same attendees
(03:21):
participate in events withrepeated content, whether there
is high-end venues, the depth ofclinical exchange, and whether
honoraria, meals, or expensesare reasonable.
These factors can raisecompliance concerns, even if the
programs were intended to informor were well intended.
(03:45):
Under the anti-kickback statute,financial arrangements that
appear to influence referralsfor federally reimbursed
services can trigger liability.
even when the intent, again, isnot explicitly improper.
That's why compliance teamsshould take a close look, and
that's our main advice for ourtalk today.
(04:05):
Not just on whether theirorganization's speaker programs
is permissible or not, but onhow they're designed and
implemented.
And there are some practicalquestions that we were thinking
about and would like to sharewith the audience.
Are the topics meaningful andclinically relevant?
(04:26):
So these are questions that ouraudience can use to practically
evaluate and assess theircompliance program when it comes
to speaking arrangements thatinvolve physicians.
Another question would be, arespeakers selected based on their
expertise and are fees supportedby fair market value
(04:47):
documentation?
Does the setting and audiencereflect the program's
educational intent?
Asking, I think, this type ofquestions can help strengthen
the internal review process,reinforce program integrity, and
reduce the risk of becoming thecenter of an enforcement action.
(05:08):
And we'll discuss those in aminute.
SPEAKER_02 (05:11):
Yeah, I agree.
Nobody wants to be the center ofthese enforcement actions.
Yeah, in any arrangement thatwe're asked to look at and
provide an opinion of commercialreasonableness and or fair
market value, the first thingwe're going to look at is what
are the services being rendered?
Are those the type of servicesthat would require or even
(05:36):
warrant any type of payment oradditional compensation.
And when I say compensation, I'mnot tying it specifically to,
you know, a normal paycheck cashcompensation, but, you know,
that would include travelreimbursement, lodging, meals,
you know, anything that you'rereceiving in exchange for either
attending a program or speakingat a program.
(05:58):
So in this specific arrangementand settlement, there were a
number of red flags.
First one, of course, being thatthese speakers were large high
prescribing physicians alreadyvery highly involved with this
specific pharmaceutical company.
(06:18):
And these speakers were itappears that these speakers may
have been chosen because of thathigh prescribing nature.
And then they were chosen totravel to these desirable
locations across the U.S.
to speak at the events.
And they were even able tosuggest different locations to
hold these events at.
(06:39):
And then just another thing onthe speaker front, the speakers
themselves didn't have toprepare anything.
Everything was already preparedand handled prior to their
involvement.
Another kind of issue in thisspecific arrangement was the
selection of the event locale.
(07:02):
And maybe not all of them, butsome of them were held at very
high-end restaurants, multiplecourse dinners, drink pairings,
things along those lines thatyou don't necessarily associate
with an educational program.
Lastly, I'd say that the thirdkind of big issue was with the
attendee list.
(07:22):
Multiple times physicians wereattending the same event on the
same exact health topic.
So just all of those factscombined made this a problematic
arrangement.
And it made it look like maybethese physicians were selected
to participate for the wrongreasons.
(07:46):
This case specifically, I think,shows the necessity of looking
at what's happening in theentirety.
Because having a physician speakin an event and providing some
sort of travel or compensationmay not be problematic.
Having an educational lunchwhere you have physicians
(08:08):
attending and sitting through apresentation Again, that may be
just a normal everydayoccurrence.
It's when all of these factshappened at the same time that
it became problematic.
So I think that's what'simportant to remember for that
first settlement.
(08:29):
The second settlement we'regoing to discuss is one I find
extremely interesting because Ilive in a provider compensation
bubble, if you will.
So I have never experienced thisissue firsthand.
Do you wanna break down thefacts of that one?
Yes,
SPEAKER_01 (08:44):
absolutely.
In the second enforcement actionthat we want to share today, It
surrounds a healthcarepublishing company.
And this healthcare publishingcompany recently agreed to pay a
seven-figure settlement toresolve allegations that it
misrepresented how many peoplehad actually requested its
(09:05):
publications in order to qualifyfor discounted postage rate.
All right, so what does thatmean?
Well, the core issue in thiscase was the government offers
discounted postage rate forcertain publications.
But the rule is that more thanhalf of the recipients have to
(09:28):
specifically request to receivethe publication in order for the
publishing company to have thatright to the discounted postage
rate.
What happens is the companyallegedly claimed the lower
rate, even though many of thenames the entity provided were
(09:49):
mailing lists that wereoutdated, records from
third-party sources that did notreally qualify under the rules.
As a result, the companyunderpaid postage rates, which
means the company, by doingthis, saved money.
A whistleblower reported theissue and in the resulting
(10:13):
settlement, the company agreedto pay restitution and the
whistleblower received a shareof the recovery and
reimbursement for legal costs.
This case, I think, serves as areminder that even everyday
business practices like mailingpublications can trigger
enforcement actions whencompanies may misrepresent key
(10:36):
facts.
And it's interesting here, theconcern wasn't about what the
company was mailing, the actualproduct.
What happened here is thatbecause the company represented
the mailing activity, the waythe company represented the
mailing activity to the U.S.
Postal Service in order toaccess this government benefit,
(10:57):
that was the issue.
Not what they were chipping, butthe fact that they provided
mailing lists with names ofclients that they didn't have in
order to access this savings,this federal government benefit.
And this led to improper costsavings, which triggers the Full
(11:19):
Claims Act.
I think the takeaway here isthat even operational steps like
shipping or mailing, especiallywhen tied to like certifications
or discounted government rates,should be reviewed through a
compliance lens.
Government enforcement isn'tlimited to healthcare billing.
(11:40):
It extends to any area wherefederal benefits are or there
are federal benefit programs orprograms any sort of federal
funded program.
Misclassifying routine businessexpenses, like in this case,
postage rates, can lead toliability under the False Claims
(12:01):
Act if government rates or fundsare involved.
And I think that is the takeawayof this case, that it's very
interesting and we don't see itevery day.
SPEAKER_02 (12:13):
Yeah, I agree.
Those are all great points.
This settlement definitely showsthat the government is kind of
looking outside the box toconsider any and all violations
of the False Claim Act and thatthey definitely come in
different shapes and sizes.
That's why it's important toinvolve your internal compliance
team or people as well as yourlegal team.
(12:34):
anytime that a governmentbenefit is being accessed, just
to ensure that you are checkingall of the correct boxes.
So now that we've kind ofdiscussed the meat of these two
settlements, as legal counsel,what are some of the main
conclusions that you've drawn?
SPEAKER_01 (12:51):
Yes, one of the biggest takeaways from these
recent cases is how significantthe False Claims Act has
expanded in its practicalapplication.
This year, 2025, we're seeingenforcement extend well beyond
traditional billionaires orupcoding, which is what we would
more traditionally see triggerFalse Claims Act issues.
(13:12):
But here, that wasn't the case.
The government applied FalseClaims Act liability theories to
marketing practices,administrative
misclassifications, and vendorrelationships, areas that once
were viewed at face value asroutine business practices or
(13:33):
operational decisions ratherthan carrying legal risk.
For example, take the speakerprogram settlement that we were
talking about earlier.
The government in that caseargued that the company was
trying to influence prescribingby holding repeated events, like
you mentioned, with the samecontent and inviting high
(13:56):
prescribing providers.
These patterns were used tosuggest that the programs
weren't just educational.
They were educational.
actually designed to drive offfederally reimbursed
prescriptions, turning a commonmarketing strategy into a
potential legal issue.
(14:17):
In the second case, somethingthat might have been seen like a
simple mailing issue usingdiscounting postage rates became
a False Claims Act matter.
The problem in these two caseswasn't clinical at first.
at all.
It came down to how the companyclassified its mailing when
(14:40):
dealing with the U.S.
Postal Service or how thespeaking arrangements were
designed.
But in both cases, thegovernment lost money and that
misstep opened the door toliability under, for one, the
False Claims Act, for the other,the anti-kickback statute.
What is the big picture message?
(15:03):
The government is looking beyondbilling codes, errors, and
claims data.
It's looking on intent,financial impact, how business
practices, whether marketing,operations, or administrative
tasks can affect federalprograms.
What before was seen as notcarrying as much legal risk,
(15:28):
these two cases actually portraya different story and they show
how These areas, marketing,operations, simple day-to-day
business tasks can triggerliability.
SPEAKER_02 (15:44):
Yeah, I agree.
I feel like there may be alittle bit of a shift happening
that just requires the need toassess this risk across a wider
range of activities than maybewhat you previously were focused
in on.
Some questions that come to mindto ask would be, are your
(16:05):
marketing practices tied tometrics that could suggest
volume-based inducement?
Can you document the servicesthat are being rendered in
exchange for for thecompensation paid?
Are you paying the samephysician multiple times for the
same services.
So why are your third partyvendors making certifications on
(16:26):
your behalf?
As you are well aware, as wellas our listeners are probably
aware, it's your responsibilityto ensure that your
certifications are accurate,especially if you're receiving
any type of government benefit.
It's important to take thatextra time to ensure that your
(16:46):
arrangements, yourcertifications, any
classifications are accurate toavoid issues like these.
What are some other issues thatyou think could help prevent
these types of situations?
SPEAKER_01 (17:00):
Yes.
Another takeaway is the role ofinternal reporting.
In both cases, governmentscrutiny began with insiders.
either through whistlebloweractions or people that flag
during internal audit issues.
(17:21):
I think this underscores theneed for more than just a
hotline on paper.
Organizations must foster aculture where employees feel
they can raise concerns and seethat those concerns are taken
seriously.
I think addressing issues earlycan make the difference between
internal resolution and externalenforcement.
(17:43):
And I think the larger questiongoes to goes beyond to beyond
are we billing correctly orcould any part of our
operations, even those unrelatedto billing, be seen as
misleading, overly aggressive,causing loss to a federal
program.
Then these questions when askedregularly inside the
(18:06):
organization can be a good wayto assess risk ahead of time.
For example, False Claims Actenforcement today is as much
about perception and structureas it is about claims.
When internal controls fail tocatch risky patterns, that's
(18:27):
where real exposure begins.
SPEAKER_02 (18:31):
Yeah, I agree.
And I think one of the easiestways to ensure you're protected,
and I know the audience isprobably already sick of hearing
us say it, is just to involveyour internal compliance, your
legal counsel, when necessary,external third-party counsel.
consultants who were able toreview the details of your
specific arrangements and helpidentify the possible risks.
(18:55):
And I think it's important toinvolve additional people in
these situations because they'reable to see a different picture
than somebody who has been veryfocused on getting the
arrangement across the finishline to start with.
So having more of a team lookthrough what's going on, they
(19:16):
may be able to something thatyou have not yet noticed, and
that'll help you remaincompliant.
So with all of this, what do youthink this means for future
enforcement?
Do you anticipate maybe a shiftin focus, more of the same?
I
SPEAKER_01 (19:33):
think something...
I think it's important to bringup at this point around those
lines is that there's a strongpush for voluntary
self-disclosure.
And I think we're going to seemore of that.
I think the government, ofcourse, would prefer a voluntary
(19:55):
self-disclosure policy.
instead of an enforcementaction.
Now, it's not alwaysrecommended, and I don't think
it's for every single case.
There are certainly certainoccasions for which a voluntary
self-disclosure should begranted.
And then there are some othersituations in which it may not
(20:18):
be the most practical way Ithink organizations that
identify and address problemsinternally tend to receive
credit, and that's veryimportant in a self-disclosure.
Those entities thatself-disclose do have a benefit,
which is that credit that thegovernment tends to give to
(20:40):
people that are forefront.
I also think delayed action orconcealment, on the other hand,
can increase penalties andreputational harm, and it's not
good either.
I think the entity asked to havea strong compliance program to
find that happy medium and tohave a standardized way to
(21:06):
assess whether illegal issue orcompliance issue amounts to a
self-disclosure or can becorrected before there is
liability or implications withthe anti-kickback statute or the
false claims act, which is thetwo statutes that we're talking
(21:26):
about today.
I think this is also a goodmoment in our conversation to
remind leadership teams andhealthcare entities to revisit
high-risk areas.
We talked about speaker programsat the beginning.
Now with these two cases, we'reseeing also marketing
(21:47):
partnerships are being lookedat, vendor contracted services.
I think legal compliance teamshould ensure that there is a
seat at the table for thebusiness people that are
carrying forward many of thesecontracts and business practices
(22:12):
to together design and executebusiness arrangements.
SPEAKER_02 (22:18):
Yeah, that's a great point.
As we are all very well aware,this world that we operate in is
definitely not aone-size-fits-all world.
So to the extent you're lookingat an arrangement that may come
under scrutiny, which thispretty widespread at this point,
(22:39):
just to be sure that you'redocumenting any specific facts
and circumstances that you'rerelying on to make your design
decisions, your executiondecisions.
For example, if you're paying aphysician to speak at an event,
some questions you may want toask yourself are, why do you
(23:02):
need a physician to participate?
Is that need...
in existence to start with.
Assuming you do, what makes thephysician you chose right for
the job?
Is there special qualificationsor background or experiences
that make that physician theright physician for the job?
(23:23):
Then you wanna dig into where isthis being held?
Is this event local to thephysician you've chosen?
If not, can you determine thatthe physician you would have to
compensate to travel to a newlocation is better suited for
this opportunity than maybe alocal physician who's already in
(23:44):
that city and does similar work.
Then I think lastly, you want tolook at what the physician's
actually doing.
Is the physician preparing aslide deck and a speech?
Is the physician presentingsomething that's been prepared
for them previously just whatare you asking that physician to
(24:09):
do?
Obviously not an exclusive listand we'll have different
questions depending on the factsand circumstances of your
specific arrangement.
But those are the types ofquestions that you'll want to
have answers.
To me, that bottom line reallyis the simple, basic questions.
(24:30):
Who can provide these services?
What unique services are beingprovided?
Where are they being provided?
When are they being provided?
And of course, I think maybe oneof the more important ones, why
is it necessary?
So I think it's fair to saythere's no end in sight for
these types of allegations andactions.
(24:52):
And since we still have a littlebit of time to keep chatting,
kind of shift gears slightly tosome of the things that could
have been done in thesesituations or others that you
may be thinking of to helprecognize potential issues
before the government isinvolved.
So for example, in thepharmaceutical case, Had
(25:17):
somebody been monitoring theinvite list to make sure that
the same attendees and speakersweren't going to the same
sessions, that could have helpedmitigate some of the risk.
Making sure you're choosing alocation that supports the type
of event that you're claiming tohave would have been helpful.
(25:42):
And I think in that specificsettlement, there were a number
of different people organizingand inviting and maybe having a
centralized, I don't know,database of sorts to monitor
what was actually going onacross the country would have
been helpful.
And of course, includingphysicians who maybe are not
(26:02):
your highest prescribingphysicians certainly seems to be
another big issue with that one.
So with regards to the secondsettlement we discussed with the
postage or even in general, isthere anything you would
suggest?
SPEAKER_01 (26:18):
Yes, absolutely.
And I agree with your takeaways100% on speaker fees and
speaking arrangements.
On the other settlement casethat we were talking about,
about the postage ratesdiscount, I would say that it's
important for legal slashcompliance teams to to require
(26:43):
some sort of sign-off for vendorcertifications tied to federal
benefits.
And let me give you a practicalexample of what I mean.
If a vendor is claiming reducedpostal rates or program
eligibility, I think the entitywho is also involved in the
(27:04):
arrangement should ensuredocumentation supports that
classification.
I...
would say don't let operationsor marketing teams submit
certifications in isolationrather provide them with a
practical way for them toidentify ahead of time certain
(27:29):
areas that could even representliability or trigger issues.
I would say also for theaudience listening, formalizing
escalation paths to yourreporting structure.
What may be less risky to whatis more risky and have some sort
(27:54):
of structure that helps businessteams to identify risk because
Compliance and legal teams willnot always be when some of the
decisions are taken,particularly when the decisions
are small or day-to-day businessroutine practices, but we are
(28:16):
seeing how those can carryenforcement as the case we were
just discussing with the postagerates discounts and the
seven-figure settlement thatended up being.
I would also say that thefulfillment, logistics, supply
(28:40):
chain teams should be trainingcompliance.
Most entities do it.
But the training, I think,should be robust in those areas,
particularly as we're seeing inthis case with the US Postal
Service settlement in which theentity misrepresented their
(29:01):
client base in order to reach acertain threshold that
eventually saved them money inthe scheme.
I think it's important thatSupply chain, fulfillment,
logistic things are trainedheavily in compliance because
(29:21):
they take routine businessdecisions every day that don't
always get to the level of legalreview or sign-on and can't
carry.
compliance risk under the FalseClaims Act, as we're seeing with
this case.
I would also say that leadersshould walk them through real
(29:44):
world examples, just like youand I are doing right now.
These enforcement actions arehelpful for business people to
see how a small routine businesspractice can carry liability and
(30:04):
can also carry enforcement fromthe government.
SPEAKER_02 (30:10):
Yeah, I agree.
Those are all great suggestions.
And I think specifically withthose real world examples, so
many times you have peopleeither new to a role or maybe
even new to your business thatjust aren't aware of the impact
that the decisions that they'remaking every day may have on
(30:32):
your business liability on theback end.
So I think that that's alwayshelpful.
The more you know So I thinkthat's all we wanted to cover
today.
So thank you so much for joiningme, Astrid, and to the audience
for listening to us.
It was great discussing thesesettlements with you.
SPEAKER_01 (30:55):
Thank you.
It was my absolute pleasure.
And that concludes today'sepisode of Speaking of Health
Law.
The compliance lessons fromthese recent settlements are
clear.
Intent, documentation, andoversight matter.
Thank you.
SPEAKER_00 (31:15):
If you enjoyed this episode, be sure to subscribe to
AHLA's Speaking of Health Lawwherever you get your podcasts.
For more information about AHLAand the educational resources
available to the health lawcommunity, visit
AmericanHealthLaw.org.
And stay updated on breakinghealthcare industry news from
the major media outlets withAHLA's Health Law Daily Podcast,
(31:35):
exclusively for AHLA Premiummembers.
To subscribe and add thisprivate podcast feed to your
podcast app, go toAmericanHealthLaw.org slash
Daily Podcast.
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