Published on February 19, 2014
A PROMOTIONA L COMPLIANCE PROGRAM Darshan Kulkarni Pharm.D, MS, Esq. Kulkarni Law Firm Kulkarni Law Firm * conformlaw.com* @FDALawyers 1
Who Am I - Education Pharm.D Darshan QA/RA Kulkarni Law Firm JD * conformlaw.com* @FDALawyers 2
How many people work in: Healthcare? Life Sciences? Others 3
Audience How many people work in: Compliance Legal Clinical Trials Marketing 4
If Compliance/ Legal Are you in the middle of developing a compliance program? 5
Who Am I - Experience Kulkarni Law Firm * conformlaw.com* @FDALawyers 6
Legal & Regulatory Penalties Why it matters? What matters? Penalties Compliance Planning Future 7 •False Claims Act •Anti-Kickback Law •Park Doctrine
Why It Matters Fraud To be discussed Pts. don’t see the LS industry as trustworthy? Still trust Impact on stock price providers 8
• • • • • • • • • FCA AKL HIPAA Park Synthes Harkonen Penalties Planning Future FALSE CLAIMS ACT
FCA - Fines 10
What Matters - FCA What is it? Actions brought by the Who brings the action? DOJ Whistleblower or qui tam provisions allow Who else bring actions in the name of the can bring the action? individuals to government, and can share in any recovery No specific intent to defraud must be proved 11
What Matters -FCA “any person who— (A) knowingly presents,to be presented Presents, or causes or causes to be presented, a false or fraudulent claim for payment or approval; (B) knowingly makes, uses, or causes to be made or makes, uses or causes to be Knowingly used, a false record or statement material to aused or made or false fraudulent claim; … ― 31 USC § 3729 12
What Matters - FCA (E) is authorized to make or deliver a document certifying receipt of property used, or to be …Without completely knowing to used, by the Government and, intendingthat the defraud the Government, makes or delivers the information on the receipt is true… receipt without completely knowing that the information on the receipt is true; … (G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government, 31 USC § 3729 13
Penalties- FCA … is liable to the United States Government for a civil penalty of not less than $5,500 and not more than $5,500/ $11,000 + 3x damages $11,000, …, plus 3 times the amount of damages which the Government sustains because of the act of that person.‖ 14
How can it be implicated? 15
• • • • • • • • • FCA AKL HIPAA Park Synthes Harkonen Penalties Planning Future ANTI- KICKBACK LAW
What Matters – Anti-Kickback Law How 17 is it initiated?
Anti Kickback Law Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care 42 USC § 1320A–7B 18
Intent – Anti-Kickback Law ―a person need not have actual knowledge of this section or specific intent to commit a violation of this section.‖ 19
Anti-Kickback Law Penalties ―… shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.‖ 20
What Matters – Anti-Kickback Law Seeding Trials Payments above FMV Sponsor research funding tied to other biz billable to govt. programs Investigator Initiated Trials 21
What Matters – Anti-Kickback Law AntiKickback FCA 22
What Matters – Anti-Kickback Law Exceptions ―Safe harbors:‖ ○ 25 safe harbors 42 C.F.R. 23 1001.952
• • • • • • • • • FCA AKL HIPAA Park Synthes Harkonen Penalties Planning Future PARK DOCTRINE
Park Doctrine - What is it? Who does this apply to? Also called ―Responsible Corporate Officer (RCO) Doctrine‖ 25
Park Doctrine - Penalties RCO can be held liable for a first time misdemeanor (and subsequent felony) under the FD&C Act without proof of intent or negligence, even if no actual knowledge of or participation in specific offense 26
Park Doctrine – Factors (Partial List) Individual’s position in the company Relationship to the violation Did the official have authority to correct or prevent violation? (Please contact me for more factors) 27
Park Doctrine - Impact Administrative Criminal Civil 28 Fines Fines Fines & Penalties
• • • • • • • • • FCA AKL HIPAA Park Synthes Harkonen Penalties Planning Future CASE STUDY Synthes
Synthes - Facts Unauthorized clinical trials of Norian-brand cements from May 2002 to late 2004 ○ Bone cement used in surgeries to treat vertebral compression fractures of the spine (―VCFs‖), commonly suffered by elderly individuals ○ These surgeries were performed despite label warning against this use and serious concerns about the safety of the devices when used in the spine ○ Manufacturer created a ―test market‖ without requesting IDE approval 3 patients died from a rapid drop in blood pressure during surgeries 30
Synthes - Impact 31
Punishments Seen – Govt. Criminal Sanctions Prison Sentence Companies: Fines 32
Punishments seen Paycuts Company Fines Demotions Terminations Institutional Punishments 33 Prison Individual Fines Government Penalties
• • • • • • • • • FCA AKL HIPAA Park Synthes Harkonen Penalties Planning Future PENALTIES
Administrative Penalties 35
Penalties- Admin Penalties ― in the case of such a statement, representation, concealment, failure, or conversion by any person in connection with the furnishing (by that person) of items or services for which payment is or may be made under the program, be guilty of a felony and upon conviction thereof fined not more than $25,000 or imprisoned for not more than five years or both, or…‖ 42 USC § 1320A–7B 36
• • • • • • • • • FCA AKL HIPAA Park Synthes Harkonen Penalties Planning Future COMPLIANCE PLANNING
Prevention Create 38 a compliance plan
Prevention – Compliance Plan Applicable to: Hospitals LS Companies LTC Providers 39 Doctor’s Office
Prevention – Compliance Plan Setting ASQ OIG 40 Up a Program
Compliance - ASQ 41
Compliance Compliance Officer/ Committee Report Overpayments Written Standards Training Program Provide OIG with annual compliance reports Restrict employment of ineligible persons Written Procedures (Please contact me for a checklist of factors) 42
Recap • Trust • Improve patient lives • Life altering Liability Why do it? Fraud What• are altering Liability you preventing? • Life • Plan How? • Do • Check • Act 43
Questions? Darshan Kulkarni Kulkarni Law Firm, PC Ph: 215-703-7842 www.conformlaw.com 44
References http://www.taf.org/whyfca.htm False Claims Act: 31 U.S.C. § 3729-3733 Anti-Kickback Law: 42 U.S.C. § 1320a-7b(b) False, Fictitious or Fraudulent Claims: 18 USC 287 http://www.mintz.com/newsletter/2012/Advisories/16180112-NAT-HCED/1618-0112-NAT-HCED_index.pdf 45
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