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What do physicians need to know about conflict of interest?

Physicians need to navigate the relationships that are built within the profession carefully to maintain patient trust and uphold professional integrity. Conflicts of interest can occur when a physician’s personal or financial interests intersect with their duty to provide unbiased, patient-centered care. These conflicts can arise from various sources, including relationships with industry, payment structures, and ownership interests.

Two key concepts every physician should know when navigating these relationships include the following.

The risk of accepting benefits

Physicians often engage with industry representatives, attend professional meetings, and collaborate on research. While these interactions offer opportunities for advancing medical knowledge and patient care, they also introduce the risk of bias. Here are some common scenarios:

  • Gifts and meals: Accepting gifts or meals from pharmaceutical, medical device, or biotechnology companies can create conflicts of interest. Physicians must be cautious not to compromise patient welfare for personal gain.
  • Promotional roles: Acting as promotional speakers or writers on behalf of companies can influence clinical decisions.
  • Financial interests: Having a financial stake in a medical product company whose products they prescribe or recommend can compromise objectivity.

The benefits that come with these arrangements can raise questions. Be prepared to back up the decision to accept such benefits in the event of an investigation.

Hurdles in payment systems

Physicians’ compensation methods can also lead to conflicts of interest. While payment systems vary, concerns are present within each option. Fee-for-service arrangements that compensate physicians based on the services they provide may align with patient needs but can encourage overutilization or unnecessary procedures. A salary-based arrangement pays physicians on fixed salaries but can translate to pressure to meet productivity targets, potentially affecting patient care.

In capitated systems, physicians receive a fixed fee per patient. While this arrangement generally promotes preventive care, it could lead to undertreatment. Physician ownership of health care facilities or self-referral practices can also create conflicts if the group does not properly manage the balance between financial interests and patient welfare.

It is important for groups to conduct regular internal audits to review their practice and better ensure compliance with applicable regulations. A failure to do so can result in allegations of conflict of interest, which could trigger an investigation by the state licensing board as well as allegations of a violation of federal regulations like the Anti-Kickback Statute (AKS).

Attorney John Rivas is responsible for this communication.