On March 11, 2022, OIG issued Advisory Opinion No. 22-05 in which it responded to a request for an advisory opinion regarding a proposed subsidization of certain cost-sharing obligations in the context of a clinical trial (Proposed Arrangement) submitted by a device manufacturer (Requestor). As discussed in further detail below, OIG determined that the Proposed Arrangement could generate prohibited remuneration under the federal Anti-Kickback Statute (AKS) and the beneficiary inducement provision of the Civil Monetary Penalties Law. However, OIG ultimately concluded that it would not impose administrative sanctions upon Requestor because the Proposed Arrangement presents a low risk of fraud and abuse.

FACTUAL BACKGROUND

Requestor manufactures an investigational therapy that uses a patient’s own cells for the treatment of ischemic systolic heart failure (Therapy) and is the sponsor of a clinical trial designed to determine the safety and efficacy of the Therapy in patients with ischemic systolic heart failure (Study).

Under the Proposed Arrangement, Requestor would pay cost-sharing obligations that Medicare beneficiaries participating in the Study otherwise would owe for Medicare-reimbursable items and services provided during the Study. Requestor would pay the cost-sharing amounts directly to the institution to which the subject otherwise would owe the amount. As a result of these subsidies, Requestor asserts that Medicare beneficiaries would incur no out-of-pocket expenses relating to their participation in the Study, other than meeting any unmet Part B deductible amounts. Requestor proposes these cost-sharing subsidies to: (i) reduce financial barriers to enrollment in the Study and reduce attrition of subjects during the two-year course of the Study; (ii) facilitate socioeconomic diversity of Study subjects; and (iii) preserve blinding of subjects.

Requestor certified that it would not advertise the existence of the availability of cost-sharing subsidies to prospective subjects. Information about the subsidies would be included in the informed consent documents provided to each subject, which is where most subjects would learn of them.

LEGAL ANALYSIS

OIG determined that the Proposed Arrangement could generate prohibited remuneration under the AKS and the beneficiary inducement provision of the Civil Monetary Penalties Law. However, OIG stated that it would not impose administrative sanctions on Requestor in connection with the Proposed Arrangement because it presents a minimal risk of fraud and abuse. In coming to this conclusion, OIG relied upon the following factors:

• The Proposed Arrangement is a reasonable means of promoting enrollment, particularly where 40% of participating beneficiaries would not have the potential to receive any therapeutic benefit during the Study.

• The Proposed Arrangement would not be advertised, which reduces risks typically associated with cost-sharing waivers, such as over-utilization and inappropriate steering.

• CMS approved the Study as a Category B IDE study, meaning CMS evaluated the study and determined that it meets criteria to ensure appropriate patient protections and that the study design is appropriate to answer questions of importance to the Medicare program and its beneficiaries. Given this determination by CMS, it appears unlikely that the Proposed Arrangement would result in overutilization or inappropriate utilization of Federal health care program items and services.

• The Proposed Arrangement is distinguishable from problematic seeding arrangements (e.g., an arrangement in which manufacturers initially offer subsidies to lock in future utilization of a reimbursable item or service) because the Requestor would only provide cost-sharing subsidies relating to one course of treatment using the Therapy and related services during the Study.

As is typical, OIG stated that Advisory Opinion No. 22-05 is limited in scope to the Proposed Arrangement. However, this opinion provides guidance as to how OIG might respond to similar requests. The OIG Opinion is available here.