AHLA's Speaking of Health Law
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AHLA's Speaking of Health Law
Lessons From Two Recent Fraud and Abuse Enforcement Actions Involving Routine Business Practices
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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Welcome to AHLA's Speaking
SPEAKER_01:of Health Law. podcast series. I'm Astrid Monroy, healthcare attorney at Barnes and Thornburg. Today, we'll explore two recent federal enforcement actions that serve as timely reminders for professionals across many areas of the healthcare space.
SPEAKER_02:Thank you, Astrid. Good afternoon. My name is Nikki Jacobson. I am a director at Stout, which is a global advisory firm specializing in corporate finance, accounting and transaction advisory, valuation, financial disputes, claims, and investigations. I specifically work with the healthcare valuation group and specialize in provider compensation arrangements. I have been doing this for over 11 years. I was previously a part of healthcare appraisers before we became part of Stout. It is great to be here discussing these important issues that serve as reminders in these F&B-related anti-kickback and False Claims Act settlements to determine some best practices.
SPEAKER_01:Thank you, Nikki. Today's discussion highlights the government's ongoing scrutiny of financial relationships in healthcare and the compliance risks that can arise from what could seem as routine business practices. Improper use of speaker programs to influence prescriber decision and inaccurate certifications to obtain government benefits are just a few examples of conduct that may trigger enforcement under the False Claims Act or the anti-kickback statute. These actions underscore the importance of maintaining transparency and accuracy in all aspects of operations. As even administrative missteps can raise significant legal concerns when they impact federal funded programs.
SPEAKER_02:Yeah, and before we jump into our conversation, I just want to point out, and I know everybody knows this, that these are the views of Astrid and myself. They're not necessarily the views of AHLA, Stout, or Barnes and Thornburg. So yeah, do you want to talk us into the first settlement?
SPEAKER_01:Absolutely. Let's dive in and break down what these recent settlements and enforcement actions highlight. Why familiar practices like speaker events and vendor relationships continue to raise flags, and what healthcare organizations can do to stay ahead of enforcement risk, especially when oversight, documentation, or intent isn't clearly established. Promotional speaker programs remain an area of close government scrutiny, particularly when there are questions about whether they serve a legitimate educational purpose or create the appearance of rewarding prescribing behavior. Regulators tend to look closely at how often the same attendees participate in events with repeated content, whether there is high-end venues, the depth of clinical exchange, and whether honoraria, meals, or expenses are reasonable. These factors can raise compliance concerns, even if the programs were intended to inform or were well intended. Under the anti-kickback statute, financial arrangements that appear to influence referrals for federally reimbursed services can trigger liability. even when the intent, again, is not explicitly improper. That's why compliance teams should take a close look, and that's our main advice for our talk today. Not just on whether their organization's speaker programs is permissible or not, but on how they're designed and implemented. And there are some practical questions that we were thinking about and would like to share with the audience. Are the topics meaningful and clinically relevant? So these are questions that our audience can use to practically evaluate and assess their compliance program when it comes to speaking arrangements that involve physicians. Another question would be, are speakers selected based on their expertise and are fees supported by fair market value documentation? Does the setting and audience reflect the program's educational intent? Asking, I think, this type of questions can help strengthen the internal review process, reinforce program integrity, and reduce the risk of becoming the center of an enforcement action. And we'll discuss those in a minute.
SPEAKER_02:Yeah, I agree. Nobody wants to be the center of these enforcement actions. Yeah, in any arrangement that we're asked to look at and provide an opinion of commercial reasonableness and or fair market value, the first thing we're going to look at is what are the services being rendered? Are those the type of services that would require or even warrant any type of payment or additional compensation. And when I say compensation, I'm not tying it specifically to, you know, a normal paycheck cash compensation, but, you know, that would include travel reimbursement, lodging, meals, you know, anything that you're receiving in exchange for either attending a program or speaking at a program. So in this specific arrangement and settlement, there were a number of red flags. First one, of course, being that these speakers were large high prescribing physicians already very highly involved with this specific pharmaceutical company. And these speakers were it appears that these speakers may have been chosen because of that high prescribing nature. And then they were chosen to travel to these desirable locations across the U.S. to speak at the events. And they were even able to suggest different locations to hold these events at. And then just another thing on the speaker front, the speakers themselves didn't have to prepare anything. Everything was already prepared and handled prior to their involvement. Another kind of issue in this specific arrangement was the selection of the event locale. And maybe not all of them, but some of them were held at very high-end restaurants, multiple course dinners, drink pairings, things along those lines that you don't necessarily associate with an educational program. Lastly, I'd say that the third kind of big issue was with the attendee list. Multiple times physicians were attending the same event on the same exact health topic. So just all of those facts combined made this a problematic arrangement. And it made it look like maybe these physicians were selected to participate for the wrong reasons. This case specifically, I think, shows the necessity of looking at what's happening in the entirety. Because having a physician speak in an event and providing some sort of travel or compensation may not be problematic. Having an educational lunch where you have physicians attending and sitting through a presentation Again, that may be just a normal everyday occurrence. It's when all of these facts happened at the same time that it became problematic. So I think that's what's important to remember for that first settlement. The second settlement we're going to discuss is one I find extremely interesting because I live in a provider compensation bubble, if you will. So I have never experienced this issue firsthand. Do you wanna break down the facts of that one? Yes,
SPEAKER_01:absolutely. In the second enforcement action that we want to share today, It surrounds a healthcare publishing company. And this healthcare publishing company recently agreed to pay a seven-figure settlement to resolve allegations that it misrepresented how many people had actually requested its publications in order to qualify for discounted postage rate. All right, so what does that mean? Well, the core issue in this case was the government offers discounted postage rate for certain publications. But the rule is that more than half of the recipients have to specifically request to receive the publication in order for the publishing company to have that right to the discounted postage rate. What happens is the company allegedly claimed the lower rate, even though many of the names the entity provided were mailing lists that were outdated, records from third-party sources that did not really qualify under the rules. As a result, the company underpaid postage rates, which means the company, by doing this, saved money. A whistleblower reported the issue and in the resulting settlement, the company agreed to pay restitution and the whistleblower received a share of the recovery and reimbursement for legal costs. This case, I think, serves as a reminder that even everyday business practices like mailing publications can trigger enforcement actions when companies may misrepresent key facts. And it's interesting here, the concern wasn't about what the company was mailing, the actual product. What happened here is that because the company represented the mailing activity, the way the company represented the mailing activity to the U.S. Postal Service in order to access this government benefit, that was the issue. Not what they were chipping, but the fact that they provided mailing lists with names of clients that they didn't have in order to access this savings, this federal government benefit. And this led to improper cost savings, which triggers the Full Claims Act. I think the takeaway here is that even operational steps like shipping or mailing, especially when tied to like certifications or discounted government rates, should be reviewed through a compliance lens. Government enforcement isn't limited to healthcare billing. It extends to any area where federal benefits are or there are federal benefit programs or programs any sort of federal funded program. Misclassifying routine business expenses, like in this case, postage rates, can lead to liability under the False Claims Act if government rates or funds are involved. And I think that is the takeaway of this case, that it's very interesting and we don't see it every day.
SPEAKER_02:Yeah, I agree. Those are all great points. This settlement definitely shows that the government is kind of looking outside the box to consider any and all violations of the False Claim Act and that they definitely come in different shapes and sizes. That's why it's important to involve your internal compliance team or people as well as your legal team. anytime that a government benefit is being accessed, just to ensure that you are checking all of the correct boxes. So now that we've kind of discussed the meat of these two settlements, as legal counsel, what are some of the main conclusions that you've drawn?
SPEAKER_01:Yes, one of the biggest takeaways from these recent cases is how significant the False Claims Act has expanded in its practical application. This year, 2025, we're seeing enforcement extend well beyond traditional billionaires or upcoding, which is what we would more traditionally see trigger False Claims Act issues. But here, that wasn't the case. The government applied False Claims Act liability theories to marketing practices, administrative misclassifications, and vendor relationships, areas that once were viewed at face value as routine business practices or operational decisions rather than carrying legal risk. For example, take the speaker program settlement that we were talking about earlier. The government in that case argued that the company was trying to influence prescribing by holding repeated events, like you mentioned, with the same content and inviting high prescribing providers. These patterns were used to suggest that the programs weren't just educational. They were educational. actually designed to drive off federally reimbursed prescriptions, turning a common marketing strategy into a potential legal issue. In the second case, something that might have been seen like a simple mailing issue using discounting postage rates became a False Claims Act matter. The problem in these two cases wasn't clinical at first. at all. It came down to how the company classified its mailing when dealing with the U.S. Postal Service or how the speaking arrangements were designed. But in both cases, the government lost money and that misstep opened the door to liability under, for one, the False Claims Act, for the other, the anti-kickback statute. What is the big picture message? The government is looking beyond billing codes, errors, and claims data. It's looking on intent, financial impact, how business practices, whether marketing, operations, or administrative tasks can affect federal programs. What before was seen as not carrying as much legal risk, these two cases actually portray a different story and they show how These areas, marketing, operations, simple day-to-day business tasks can trigger liability.
SPEAKER_02:Yeah, I agree. I feel like there may be a little bit of a shift happening that just requires the need to assess this risk across a wider range of activities than maybe what you previously were focused in on. Some questions that come to mind to ask would be, are your marketing practices tied to metrics that could suggest volume-based inducement? Can you document the services that are being rendered in exchange for for the compensation paid? Are you paying the same physician multiple times for the same services. So why are your third party vendors making certifications on your behalf? As you are well aware, as well as our listeners are probably aware, it's your responsibility to ensure that your certifications are accurate, especially if you're receiving any type of government benefit. It's important to take that extra time to ensure that your arrangements, your certifications, any classifications are accurate to avoid issues like these. What are some other issues that you think could help prevent these types of situations?
SPEAKER_01:Yes. Another takeaway is the role of internal reporting. In both cases, government scrutiny began with insiders. either through whistleblower actions or people that flag during internal audit issues. I think this underscores the need for more than just a hotline on paper. Organizations must foster a culture where employees feel they can raise concerns and see that those concerns are taken seriously. I think addressing issues early can make the difference between internal resolution and external enforcement. And I think the larger question goes to goes beyond to beyond are we billing correctly or could any part of our operations, even those unrelated to billing, be seen as misleading, overly aggressive, causing loss to a federal program. Then these questions when asked regularly inside the organization can be a good way to assess risk ahead of time. For example, False Claims Act enforcement today is as much about perception and structure as it is about claims. When internal controls fail to catch risky patterns, that's where real exposure begins.
SPEAKER_02:Yeah, I agree. And I think one of the easiest ways to ensure you're protected, and I know the audience is probably already sick of hearing us say it, is just to involve your internal compliance, your legal counsel, when necessary, external third-party counsel. consultants who were able to review the details of your specific arrangements and help identify the possible risks. And I think it's important to involve additional people in these situations because they're able to see a different picture than somebody who has been very focused on getting the arrangement across the finish line to start with. So having more of a team look through what's going on, they may be able to something that you have not yet noticed, and that'll help you remain compliant. So with all of this, what do you think this means for future enforcement? Do you anticipate maybe a shift in focus, more of the same? I
SPEAKER_01:think something... I think it's important to bring up at this point around those lines is that there's a strong push for voluntary self-disclosure. And I think we're going to see more of that. I think the government, of course, would prefer a voluntary self-disclosure policy. instead of an enforcement action. Now, it's not always recommended, and I don't think it's for every single case. There are certainly certain occasions for which a voluntary self-disclosure should be granted. And then there are some other situations in which it may not be the most practical way I think organizations that identify and address problems internally tend to receive credit, and that's very important in a self-disclosure. Those entities that self-disclose do have a benefit, which is that credit that the government tends to give to people that are forefront. I also think delayed action or concealment, on the other hand, can increase penalties and reputational harm, and it's not good either. I think the entity asked to have a strong compliance program to find that happy medium and to have a standardized way to assess whether illegal issue or compliance issue amounts to a self-disclosure or can be corrected before there is liability or implications with the anti-kickback statute or the false claims act, which is the two statutes that we're talking about today. I think this is also a good moment in our conversation to remind leadership teams and healthcare entities to revisit high-risk areas. We talked about speaker programs at the beginning. Now with these two cases, we're seeing also marketing partnerships are being looked at, vendor contracted services. I think legal compliance team should ensure that there is a seat at the table for the business people that are carrying forward many of these contracts and business practices to together design and execute business arrangements.
SPEAKER_02:Yeah, that's a great point. As we are all very well aware, this world that we operate in is definitely not a one-size-fits-all world. So to the extent you're looking at an arrangement that may come under scrutiny, which this pretty widespread at this point, just to be sure that you're documenting any specific facts and circumstances that you're relying on to make your design decisions, your execution decisions. For example, if you're paying a physician to speak at an event, some questions you may want to ask yourself are, why do you need a physician to participate? Is that need... in existence to start with. Assuming you do, what makes the physician you chose right for the job? Is there special qualifications or background or experiences that make that physician the right physician for the job? Then you wanna dig into where is this being held? Is this event local to the physician you've chosen? If not, can you determine that the physician you would have to compensate to travel to a new location is better suited for this opportunity than maybe a local physician who's already in that city and does similar work. Then I think lastly, you want to look at what the physician's actually doing. Is the physician preparing a slide deck and a speech? Is the physician presenting something that's been prepared for them previously just what are you asking that physician to do? Obviously not an exclusive list and we'll have different questions depending on the facts and circumstances of your specific arrangement. But those are the types of questions that you'll want to have answers. To me, that bottom line really is the simple, basic questions. Who can provide these services? What unique services are being provided? Where are they being provided? When are they being provided? And of course, I think maybe one of the more important ones, why is it necessary? So I think it's fair to say there's no end in sight for these types of allegations and actions. And since we still have a little bit of time to keep chatting, kind of shift gears slightly to some of the things that could have been done in these situations or others that you may be thinking of to help recognize potential issues before the government is involved. So for example, in the pharmaceutical case, Had somebody been monitoring the invite list to make sure that the same attendees and speakers weren't going to the same sessions, that could have helped mitigate some of the risk. Making sure you're choosing a location that supports the type of event that you're claiming to have would have been helpful. And I think in that specific settlement, there were a number of different people organizing and inviting and maybe having a centralized, I don't know, database of sorts to monitor what was actually going on across the country would have been helpful. And of course, including physicians who maybe are not your highest prescribing physicians certainly seems to be another big issue with that one. So with regards to the second settlement we discussed with the postage or even in general, is there anything you would suggest?
SPEAKER_01:Yes, absolutely. And I agree with your takeaways 100% on speaker fees and speaking arrangements. On the other settlement case that we were talking about, about the postage rates discount, I would say that it's important for legal slash compliance teams to to require some sort of sign-off for vendor certifications tied to federal benefits. And let me give you a practical example of what I mean. If a vendor is claiming reduced postal rates or program eligibility, I think the entity who is also involved in the arrangement should ensure documentation supports that classification. I... would say don't let operations or marketing teams submit certifications in isolation rather provide them with a practical way for them to identify ahead of time certain areas that could even represent liability or trigger issues. I would say also for the audience listening, formalizing escalation paths to your reporting structure. What may be less risky to what is more risky and have some sort of structure that helps business teams to identify risk because Compliance and legal teams will not always be when some of the decisions are taken, particularly when the decisions are small or day-to-day business routine practices, but we are seeing how those can carry enforcement as the case we were just discussing with the postage rates discounts and the seven-figure settlement that ended up being. I would also say that the fulfillment, logistics, supply chain teams should be training compliance. Most entities do it. But the training, I think, should be robust in those areas, particularly as we're seeing in this case with the US Postal Service settlement in which the entity misrepresented their client base in order to reach a certain threshold that eventually saved them money in the scheme. I think it's important that Supply chain, fulfillment, logistic things are trained heavily in compliance because they take routine business decisions every day that don't always get to the level of legal review or sign-on and can't carry. compliance risk under the False Claims Act, as we're seeing with this case. I would also say that leaders should walk them through real world examples, just like you and I are doing right now. These enforcement actions are helpful for business people to see how a small routine business practice can carry liability and can also carry enforcement from the government.
SPEAKER_02:Yeah, I agree. Those are all great suggestions. And I think specifically with those real world examples, so many times you have people either new to a role or maybe even new to your business that just aren't aware of the impact that the decisions that they're making every day may have on your business liability on the back end. So I think that that's always helpful. The more you know So I think that's all we wanted to cover today. So thank you so much for joining me, Astrid, and to the audience for listening to us. It was great discussing these settlements with you.
SPEAKER_01:Thank you. It was my absolute pleasure. And that concludes today's episode of Speaking of Health Law. The compliance lessons from these recent settlements are clear. Intent, documentation, and oversight matter. Thank you.
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