1. Identifying Compliance Issues Raised By E-Health Transactions and Strategies Guy Collier, Esq. Gadi Weinreich, Esq. Shaw Pittman September 27, 2000

2. HospitalPhysician Website Vendor Patient Supplier/ Provider Example

3. Laws Anti-Kickback Laws Physician Self-Referral Laws Beneficiary Inducement Laws Patient Privacy Laws Physician Licensure Laws Provider Licensure Laws Supplier Licensure Laws State Fee Splitting Laws

4. Physician Website Vendor Hospital Hospital-Vendor-Physician Arrangement

5. Analysis Arrangement –Hospital wants to provide websites to affiliated physicians –Website will have hospital logo and link to hospital website on home page –Hospital hires third party vendor to establish/ maintain physician websites –Vendor furnishes “data mining” services for hospital and reports results

6. Analysis Potential Legal Issues –Kickback: Payment for “referrals” Payment = free website Is one purpose to induce referral of patients? If not, why is hospital giving physician website? Other explanations (e.g., marketing hospital to physician’s patients) Exceptions/Safe Harbors: personal services? Nominal value issue

7. Analysis –Kickback: Payment for “recommendation” Discussed below –Physician Self-Referral (“Stark”) Compensation arrangement between hospital and physician? Direct? Indirect? Remuneration = website Exceptions: personal services/other? –Patient Privacy Data mining; reports

8. Physician Supplier/ Provider Supplier/Provider-Physician Relationship

9. Analysis Arrangement –Pharmacy places banner advertisement and link on physician’s website –Pharmacy compensates physician: Flat fee Traffic volume; “hits” on pharmacy link/website Percentage of on-line purchases (Rx versus non-Rx) Other

10. Analysis Legal Issues –Kickback Payment for “referrals” (same as above) Payment for “recommendation” –Recommendation = advertisement/link »Exclusivity »Size »Placement »Text »Disclaimers »AO 99-8 (Yes); AO 99-12 (No)

11. Analysis Exceptions/Safe Harbors: personal services –Fair market value –Aggregate compensation set in advance –Volume or value –Full-time versus part-time –One-year term (termination with/without cause)

12. Analysis Risk: Four Factor Test (AO 99-8) –Party engaged in marketing (physician versus non- practitioner/provider) –Nature (coerciveness) of marketing (telemarketing versus newspaper advertisement) –Item or service being marketed (specific item/service versus provider logo) –Target audience (beneficiaries versus general public)

13. Analysis Risk: Other Factors –Is compensation tied to purchases of covered items/services –Fixed fee versus compensation based on volume/value of hits or business generated

14. Analysis Physician Self-Referral (“Stark”) –Does supplier/provider “furnish” DHS? –Physician has “compensation arrangement” with supplier/provider? –If physician makes a “referral,” Stark law implicated Exception: personal services; other?

15. Physician Patient Supplier/ Provider Supplier/Provider-Physician- Patient Relationship

16. Analysis Arrangement –Pharmacy offers discounts (rebates, coupons, “points,”etc.) to patients who access pharmacy website through physician website and purchase items from pharmacy

17. Analysis Legal Issues –Kickback: From pharmacy to patients Payment to induce “purchases” What can discount, points, etc. be used for: covered items versus non- covered items –See AO 99-12 (coupons for non- covered items only) Exceptions: discounts –Kickback: From pharmacy to physician Payment to induce “referrals”

18. Analysis Beneficiary Inducement Law –Elements Remuneration Knows/Should Know “Likely to influence” beneficiary Purchase/receive from particular “provider, supplier, or practitioner” –Penalties CMP = $10,000 Exclusion –Exceptions

19. Analysis –Analysis Points as inducement to use pharmacy –Remuneration = discount/points –Knows/Should Know = possibly –“Likely to influence” = possibly –Purchase covered items = ? »See AO 99-12 (coupon could not be used re covered items) –From particular “provider, supplier, or practitioner” = yes, the pharmacy

20. Analysis –Exceptions »Discount »Nominal value (?) »Cash Equivalent (?)

21. Analysis Points as inducement to use physician –Remuneration = discount/points –Knows/Should Know = possibly –“Likely to influence” = possibly »AO 99-12 (no) –Purchase covered items = yes, physician services –From particular “provider, supplier, or practitioner” = yes, physician –Exceptions:

22. Contact Information Guy Collier, Esq. –(202) 663-8138 –guy.collier@shawpittman.com Gadi Weinreich, Esq. –(202) 663-8236 –gadi.weinreich@shawpittman.com