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Scientific Deception

By Michael E. Clark
July 06, 2005

Regulators are increasingly becoming concerned about pharmaceutical companies that offer financial and other incentives to physician-researchers, reasoning that the incentives may affect the physicians' judgment when they make treatment decisions for beneficiaries of health care programs. They think that this can result in increased costs being passed on to the federal government. In the worst-case scenario, such incentives could cause medically unnecessary items and services to be provided, and patients to be harmed.

Because the health care industry is so highly regulated, many health care transactions may draw government scrutiny. Clinical research is not immune from such scrutiny, particularly with the ever-increasing amounts of money, both public and private, being funneled into these activities. The main federal laws addressing financial arrangements between physicians and potential referral sources are the Ethics in Patient Referrals Act, more commonly called the Stark Law (42 U.S.C. ' 1395nn), the Medicare and Medicaid Antikickback Statute (42 U.S.C. ' 1320a-7b) and the False Claims Act (the civil False Claims Act is codified at 31 U.S.C. ' 3729, while the criminal False Claims Act is codified at 18 U.S. C. ' 387). The first two of these laws require physicians who enter into financial arrangements with potential referral sources for which claims for items or services may be presented to federal health benefit programs to try to structure their affairs to fall within one of the narrow statutory or regulatory exceptions or safe harbors the False Claims Act provisions essentially require persons who cause claims to be submitted to the federal government for reimbursement to do so in an honest manner.

Federal Oversight of Fraud and Abuse Laws Affecting Clinical Researchers

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