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Bundling designer postop surgical packs with IOLs
Are there any legal problems if a manufacturer offers a surgi-pack at no charge with the sale of an IOL or if a physician sells the surgi-pack?
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An IOL manufacturer has embarked on a new marketing campaign to sell its latest IOL. The lens is priced at $120, but the manufacturer offers a postop surgical pack with a variety of items, including postoperative sunglasses, eye drops and other health-related materials manufactured by the IOL manufacturer’s parent company.
Unlike other postoperative surgical packs, this surgical pack is leather, rather than the traditional vinyl, and has the name of the medical practice embossed on the pack. The designer surgi-pack is an instant hit, and several ophthalmic practices and ASCs hope to supplement their income by charging patients an additional $25 for the surgi-pack. Are there any legal problems presented by the manufacturer offering the surgi-pack at no charge with the sale of an IOL or by the physician or ASC selling the surgi-pack?
It is all in the wording
As presented above, there are legal problems that could create liability for the physician practices and the ASCs. As an initial matter, the provision of surgi-packs by lens manufacturers is a common practice in the ophthalmic industry. Generally, if the packs are provided by the manufacturer at no charge for each purchase of an IOL, there should be no problem, as long as the physician or ASC provides it to the patient at no charge and the surgi-pack has the logo of the manufacturer, not the physician or ASC.
If the surgi-pack has any promotional materials relating to the physician practice or ASC, however, it could be viewed that the manufacturer is providing something of value (ie, marketing material), and the practice could be construed to constitute a kickback. If the patient were charged for the surgi-pack, the kickback risk would be significantly greater.
The provision of the “designer” postop pack only exacerbates the potential issues, particularly if each pack carries with it the name or logo of the physician practice or the ASC. These facts would further support the allegation that the surgi-packs constitute something of value to the physician or ASC, received in exchange for the purchase of an IOL.
As a general rule, physician practices and ASCs are free to accept postop surgi-packs from IOL manufacturers as long as they do not charge the patients for the packs and as long as the packs do not serve as a marketing tool for the physician practice or the ASC. On the other hand, if the physician practice or ASC purchased the surgi-pack, they would be free to charge the patient and to have the surgi-pack carry the physician practice or ASC name or logo.
In this case, however, it is important to assure that the physician practice or ASC paid fair-market value for the surgi-pack. Just as discussed in the context of free surgi-packs, any payment below fair market value could subject the practice or ASC to potential kickback allegations.
In summary, if the surgi-packs are provided free of charge, they are only to be used as a marketing tool for the company. Furthermore, if they are provided free of charge, the physician or the or ASCS must provide them to the patient free of charge.
For Your Information:
- Alan E. Reider, JD, can be reached at Arent Fox PLLC, 1050 Connecticut Ave. NW, Washington, DC 20036; 202-857-6462; fax: 202-857-6395; e-mail: reider.alan@arentfox.com.