Relationships with drug and device companies come with risk. Fortunately, the risk is manageable by using common sense to structure payments.
Imagine you’re in a clinic or hospital and a medical device company representative approaches you and says, “we think you’re doing wonderful work. We’d love to use you to showcase our fancy device.”
Perhaps they want to bring people in on tours to see a new scanner or have your physicians teach others how to perform the latest and greatest procedure using their device. They offer to compensate you for your time. In fact, they’ll give you $5,000 for every day they have someone on site. It sounds like a great deal, right? It’s manna from heaven.
In actuality, this sort of arrangement can get you into dire straits. I am not suggesting that it’s improper to get paid for providing assistance to a drug or device company. As long as the compensation is fair-market value for work actually provided, the arrangement can be both legal and advantageous. However, it is important to be certain that the payment really is reasonable for the work being done. For example, if the company asks you to allow someone to shadow one of your professionals for the day, it is quite possible that the shadowing will slow your professional down. Compensation for the lost time is entirely appropriate. In addition, it is likely reasonable to receive payment for the fact that your efforts are adding value to the device company.
But if the payment from the company has the effect of doubling your professional’s compensation for the day, whereas the amount of work provided increases by 10 percent, it is quite easy for someone to argue that one purpose of the payment is to influence referral decisions. For example, I’ve seen arrangements through which a physician was paid $5,000 to allow a sales representative to shadow them for a day. If you think about it, that is an annualized payment of nearly $1 million to let someone stand over your shoulder. That could prove difficult to defend. By contrast, if someone is expected to travel out of town for a day and give a speech, $5,000 might not be sufficient to compensate the organization for lost revenue. It is definitely possible to design compliant relationships with drug and device companies. But it is important to be transparent and thoughtful.
I once represented a physician group located in a property where a device company wanted to rent space. The group sent the company a lease. The device company insisted, quite bizarrely, that leases were potentially problematic under the federal anti-kickback law, and that it would be better to refer to the arrangement as a “grant.” Unfortunately, the group relented and accepted a $30,000 “grant” from the device company for space and equipment to operate a dry demonstration lab.
Years later, I found myself trying to explain to a U.S. Attorney why the space lease was labelled a grant, which made it sound like a gift from a company. The problem was compounded by the fact that despite the clinic’s hopes that it would become a teaching haven, the space was not utilized. The conversation with the government would have been much easier if the agreements had been labelled properly.
I will add that I have never understood why people include in their contracts “this agreement does not violate the anti-kickback statute.” While nearly every contract says it, just because everyone does something doesn’t mean it is wise. If you were on the jury, would you believe the assertion written in the contract, or would it prompt you to wonder if they “doth protest too much?” After all, why would someone put so much effort into claiming they were not breaking the law unless there was at least a question about this fact?
Relationships with drug and device companies can be great, but they come with risk. Fortunately, the risk is manageable by using common sense to structure the payments.
Many healthcare facilities have implemented processes that require clinical documentation integrity (CDI) staff to review all patients as quickly as possible to establish a working
In January 2026, the White House released a fact sheet announcing a call by Donald J. Trump for Congress to enact the “Great Healthcare Plan.”
Please log in to your account to comment on this article.
Expert presenters Kathy Pride, RHIT, CPC, CCS-P, CPMA, and Brandi Russell, RHIA, CCS, COC, CPMA, break down complex fracture care coding rules, walk through correct modifier application (-25, -57, 54, 55), and clarify sequencing for initial and subsequent encounters. Attendees will gain the practical knowledge needed to submit clean claims, ensure compliance, and stay one step ahead of payer audits in 2026.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.
Stay ahead of the 2026-2027 audit surge with “Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue,” a high-impact webcast led by Michael Calahan, PA, MBA. This concise session gives hospitals and physicians clear insight into the most likely federal audit targets, such as E/M services, split/shared and critical care, observation and admissions, device credits, and Two-Midnight Rule changes, and shows how to tighten documentation, coding, and internal processes to reduce denials, recoupments, and penalties. Attendees walk away with practical best practices to protect revenue, strengthen compliance, and better prepare their teams for inevitable audits.
As AI reshapes healthcare compliance, the risk of biased outputs and opaque decision-making grows. This webcast, led by Frank Cohen, delivers a practical Four-Pillar Governance Framework—Transparency, Accountability, Fairness, and Explainability—to help you govern AI-driven claim auditing with confidence. Learn how to identify and mitigate bias, implement robust human oversight, and document defensible AI review processes that regulators and auditors will accept. Discover concrete remedies, from rotation protocols to uncertainty scoring, and actionable steps to evaluate vendors before contracts are signed. In a regulatory landscape that moves faster than ever, gain the tools to stay compliant, defend your processes, and reduce liability while maintaining operational effectiveness.
Get clear, practical answers to Medicare’s most confusing regulations. Join Dr. Ronald Hirsch as he breaks down real-world compliance challenges and shares guidance your team can apply right away.
Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
