On December 21, 2023, the OIG issued a favorable advisory opinion (Advisory Opinion 23-11) regarding the proposed subsidization of certain Medicare cost-sharing obligations in the context of a clinical trial.

The requestor was a manufacturer of a medical device that is designed to modulate the strength of cardiac muscle contraction in patients with heart failure (Device), which has been approved by the FDA for use in patients with heart failure who meet certain criteria. The requestor is also sponsoring a clinical trial designed to determine the effectiveness and safety of the Device in a different population of heart failure patients—those with a higher ejection fraction between 40% and 60%. The Device is intended as a one-time treatment.

Under the proposed arrangement (Proposed Arrangement), the requestor would pay cost-sharing obligations that Medicare beneficiaries participating in the clinical trial would normally owe for clinical trial-related Medicare-reimbursable items and services provided during the clinical trial up to a maximum of $2,000 per clinical trial participant. The purposes of these payments, according to the requestor, are to (i) reduce financial barriers to enrollment and prevent attrition from the clinical trial due to financial reasons; (ii) facilitate socioeconomic diversity of the clinical trial population, and (iii) preserve blinding of participants. The requestor stated that Medicare beneficiaries would likely incur cost-sharing obligations for billable items and services associated with appointments required as part of the clinical trial.

OIG concluded that the Proposed Arrangement would implicate the Federal anti-kickback statute (AKS) because the subsidies could induce Federal health care program beneficiaries to participate in the clinical trial where they would receive health care services reimbursable by a Federal health care program. OIG also concluded that the Proposed Arrangement would implicate the civil monetary penalty provision prohibiting inducements to beneficiaries (CMP) because the remuneration would be likely to influence a beneficiary to receive Medicare-billable items and services from a particular provider.

Although OIG concluded that the Proposed Arrangement would not fall squarely within one of the AKS exceptions to the definition of “remuneration” for the CMP or any safe harbor to the AKS, OIG concluded that it would not impose sanctions for the following reasons:

1. OIG concluded that the Proposed Arrangement was a reasonable means of promoting enrollment in the clinical trial. OIG explained that the cost-sharing expenses would be cost prohibitive for many Medicare beneficiaries who otherwise would participate in the clinical trial, and the requestor’s subsidy could help ensure enough participants are enrolled for the clinical trial. OIG also explained that the requestor’s subsidy was reasonable to facilitate enrollment of a socioeconomically diverse set of clinical trial participants.
2. OIG concluded that the Proposed Arrangement would pose a low risk of overutilization or inappropriate utilization of services payable by a Federal health care program. OIG explained that although the Proposed Arrangement might increase utilization of items and services, there is nothing to suggest that such an increase would be inappropriate.
3. OIG concluded that the Proposed Arrangement is distinguishable from problematic seeding arrangements where manufacturers initially offer subsidies to lock in future utilization of a reimbursable item or service. OIG reasoned that because the Device is intended to be a one-time treatment, and the requestor does not anticipate that use of the Device would prompt future utilization by participants in the clinical trial of any other products manufactured by the requestor, the Proposed Arrangement poses a low risk of abuse.

OIG’s Advisory Opinion 23-11 can be read here.