Ethical and Regulatory Implications of Payments for the Referral of Research Participants

With the ever-increasing number of clinical research activities occurring at any one time, researchers often find themselves in a quandary – how to recruit the necessary number of human subjects. Fortunately for investigators, what used to require seemingly endless efforts to identify appropriate candidates can now be as easy as contacting hospitals and physician groups for referrals.

Now more than ever, hospitals and physicians seek to facilitate and support clinical research activities and to foster relationships with researchers. One important way this is accomplished is through the referral of eligible candidates for clinical trial participation. While such referrals are permissible when made in accordance with applicable legal requirements, including patient confidentiality rules and regulations such as the Health Insurance Portability and Accountability Act of 1996 and related regulations, the way in which hospitals and physicians are reimbursed for such referrals may implicate certain ethical and legal guidelines. This discussion examines whether the simple and direct approach of payment per identified research candidate is advisable from a legal and ethical perspective.

I. Impact of Applicable Rules and Regulations¹

Much of the clinical research conducted today is subject to Food and Drug Administration ("FDA") rules and regulations governing research on drugs for human use and the Federal Policy for the Protection of Human Subjects under Title 45 C.F.R. Part 46 (the "Common Rule"). Additionally, depending on the funding sources for a particular clinical research protocol, the rules of the National Institutes of Health ("NIH") may also be implicated.

A. Current State of the Common Rule and FDA and NIH Rules and Regulations

To date, the Common Rule and FDA and NIH rules and regulations do not specifically prohibit payment for patients referred for participation in clinical research trials. However, over the past several years a number of federal agencies and national healthcare organizations have expressed a concern that payment for referral of research participants is inappropriate. In fact, the Office of Inspector General, for the Department of Health and Human Services, published two documents in June 2000 which address the recruitment of human subjects – Recruiting Human Subjects, Pressures in Industry-Sponsored Clinical Research and Recruiting Human Subjects, Sample Guidelines for Practice² (collectively referred to herein as the "Reports") – and are intended to guide patient recruitment activity and provide groundwork for legislative changes that will require compliance with specific legal requirements in the future.

The Reports address three main issues: recruitment incentives, the dual investigator-physician role and the confidentiality of medical records. With respect to recruitment incentives or referral fees, the Reports indicate that many professional medical associations prohibit such referral fees based on the belief that they are unethical.³ The American Medical Association, for example, asserts that "offering or accepting payment for referring patients to research studies (finder's fees) is unethical."⁴ Other groups call for disclosure to patients of incentives or other referral payments.⁵ The Reports also cite several policies of health systems and academic institutions that prohibit referral incentives, or otherwise limit such activity.⁶ Finally, the Reports call for specific legal requirements regarding recruiting practices in order to curb any potential abuse.⁷

Beyond the potential conflict of interest that referral incentives may create, other reported concerns include that such incentives may (i) prompt investigators to distort information provided to potential subjects during the consent process, (ii) pressure potential subjects to enroll, (iii) encourage researchers to mishandle confidential patient information or (iv) cause investigators to stretch eligibility criteria to enroll a potential subject.⁸ While much of the concern stems from the dual investigator-physician role – where referral incentives implicate conflict of interest, patient trust and related issues in a doctor-patient relationship – one or more of these issues could also arise in the context of a hospital/physician-patient relationship given a hospital or physician group's relationship with its patients.

Based on information provided in the Reports and other documents assessing the appropriateness of payment for referrals, it is evident that Federal rules or regulations will likely be developed over the next several years to curb or at least limit such activity. While current Common Rule, FDA and NIH rules and regulations do not prohibit payment for referrals at this time, any organization contemplating such practice should consider the industry concerns reflected in the Reports and whether the practice would contradict the organization's own code of ethics. Moreover, in the event that a hospital or physician group chooses to accept recruitment incentives, it should also track legislative changes that may prohibit or otherwise limit such activity in the future so as to remain compliant with applicable law.⁹

B. Implications of the Anti-Kickback Statute

Beyond concerns that the proposed referral incentives could have ethical implications that may lead to their legal prohibition in the near future, or contradict an organization's code of ethics, such incentives may also implicate the Anti-Kickback Statute. Since the Anti-Kickback Statute prohibits payment for referral of patients for services that may be reimbursed under Medicare and Medicaid, providers should avoid any payment for referrals that could implicate these Federal programs.¹⁰

With respect to Medicare patients, per patient referral incentives are inadvisable regardless of the status of the Common Rule and FDA and NIH rules and regulations. Although Medicare currently does not reimburse directly for clinical research, it does cover usual patient care services needed while participating in clinical trials or needed as a result of such participation.¹¹ Accordingly, given the nexus between patients who may be referred by a hospital or physician group for clinical research trial participation and Medicare billing by a hospital or physician group in the event any such patient requires healthcare services during or as a result of participation (e.g., a patient suffers an adverse outcome and requires inpatient or outpatient services through a hospital or physician group which would be billed to Medicare), the Anti-Kickback Statute may be implicated by payment for referral of Medicare patients to clinical research trials through a hospital or physician group.

While a hospital or physician group could take the approach that the referral payments are strictly for referrals to clinical trials, and any ensuing that Medicare or Medicaid services related to participation in the trials are an unanticipated byproduct, given how direct the payment is to the referral and how the potential exists for related Medicare and Medicaid services, this may not be prudent under the Anti-Kickback Statute.

II. Potential Alternatives

Although hospitals and physician groups should exercise caution when entering into agreements whereby payments are received for patients (especially Medicare/Medicaid patients) referred to a researcher for clinical trial participation, and such referrals should be made in accordance with applicable laws (e.g., patient confidentiality laws), they should not be discouraged from continuing to support clinical research and working with researchers or others to develop appropriate relationships to foster clinical research. Neither the Reports, the industry comments referenced in the Reports, the Common Rule, FDA and NIH rules and regulations, nor the Anti-Kickback Statute, prohibit or criticize working to identify appropriate candidates for clinical trials. In fact, part of the concern in further legislating in this area is that it will impede research efforts.

Therefore, parties should carefully consider alternate ways of fairly compensating a hospital or physician group for the time and effort required to identify appropriate clinical trial candidates, while avoiding mechanisms that could encourage inappropriate referrals or provide a nexus between such referrals and the Anti-Kickback Statute. A simple approach would be for the researcher to reimburse a hospital or physician group certain salary and benefits, on a pro rata basis, for employee time dedicated to working through patient health information, consent and related matters in order to facilitate clinical trial participation through researcher-coordinated activity. Or, to the extent a hospital or physician group's efforts in recruiting subjects for clinical trials facilitates a researcher's ability to meet its responsibilities to sponsors, for which it receives sponsor funds, part of the sponsor funds could be allocated to a hospital or physician group.

1. This discussion focuses on Federal Law. Before entering into any payment arrangement for the referral of research participants, hospitals and physician groups are encouraged to consult applicable state laws.
2. The Reports are numbered OEI-01-97-00195 (hereinafter referred to as "Report 195") and OEI-01-97-00196 (hereinafter referred to as "Report 196"), respectively, and are available on the Internet at http://oig.hhs.gov/oei/reports/oei-01-97-00195.pdf and http://oig.hhs.gov/oei/reports/oei-01-97-00196.pdf.
3. Report 196 at 9.
4. Id.
5. Id.
6. Id. at 8-9.
7. Id. at 15; Report 195 at 33.
8. Report 195 at 20-26; Report 196 at 8.
9. For example, currently pending House Resolution 4697 (107th Cong. § 2 (2002)) includes provisions regarding the disclosure of investigator conflict of interest, including financial interests, and obtaining the proper informed consent of research subjects. Also significant in the legislation are provisions regarding "harmonization" of existing rules and regulations addressing clinical research within 3 years of the passage of the law.
10. The Anti-Kickback Statute provides that whoever knowingly and willfully solicits or receives any remuneration (including kickback, bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which the payment may be made in whole or in part under a Federal or State health program (including Medicare and Medicaid), or in return for purchasing, leasing, ordering or arranging for or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part under such programs, shall be guilty of a felony. 42 U.S.C. § 1320a-7b(b)(1).
11. See 42 C.F.R. § 413.90 (2001) for a discussion of allowable research costs, and general Medicare/Medicaid payment provisions for a discussion of reimbursement to hospitals and physicians for medically reasonable and necessary care.