Donated pharmacists get thumbs-down from OIG

OIG has nixed a mail-order pharmacy's plan to station and pay for pharmacists at hospital transplant centers. In an unusually sharp advisory opinion (No. 98-16), the agency concluded that such an arrangement would probably violate the anti-kickback statute.

Under the pharmacy's proposal, the pharmacist would have worked with transplant teams, overseen pharmaceutical care plans for patients, and handled all billing and collections for prescriptions. Hospitals would recommend specific pharmacists, while the pharmacy could hire current or former employees of the hospital.

Don't even think about it, replied OIG, noting that its policy has been one of "antipathy" to any arrangements where potential sources of referrals get free or below-market services. "We infer that one purpose of the free services is to induce referrals," says the opinion. Further underscoring how seriously OIG takes this issue, the opinion cites a special fraud alert in which OIG warned against labs stationing phlebotomists at physician offices.

Like most advisory opinions, this one is valuable in that it tells you how not to raise government hackles. First, freebies are suspect when they allow providers to shift costs. For example, extending the carrot of allowing hospitals to pick the pharmacists for their institutions would allow them to shift payroll costs. Interestingly, a competitor of the pharmacy that asked for the opinion has circulated advertisements that promise transplant centers would save money "in costly staff positions and relief of burdens imposed on existing staff."

Second, the degree to which a provider can affect patient referrals is key. Patients receiving organ transplants need plenty of postoperative care, giving transplant centers a huge say in where patients get their outpatient drugs.

This is a difficult issue for providers, says attorney Paul DeMuro, JD, at Latham Watkins in San Francisco. If a pharmacy or a lab sends an employee to work for free at a hospital or doctor's office, it's going to raise eyebrows. The way to pacify regulators would be for the provider to pay fair market value for the use of the employee — but why would anyone bother to do that when they could use one of their own people for the same price? The only exception, says DeMuro, would be if a provider could show that the donated employee had a special skill that the provider could not obtain elsewhere.