OIG Issues Advisory Opinion Permitting Cost-Sharing for Medicare-Reimbursable Items and Services in a Clinical Trial

King & Spalding

On November 19, 2021, OIG issued Advisory Opinion No. 21-17 in which it responded to a request for an advisory opinion regarding a proposed subsidization of certain Medicare 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 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.


Requestor manufactures an implantable medical device approved by the FDA for two indications: (i) use as an adjunctive therapy in reducing the frequency of seizures in patients with partial onset seizures that are refractory to antiepileptic medications; and (ii) use as an adjunctive long-term treatment of chronic or recurrent depression for patients who are experiencing a major depressive episode and have not had an adequate response to four or more adequate antidepressant treatments. Requestor is sponsoring a clinical trial designed to determine whether the device achieves superior reduction in baseline depressive symptom severity in patients with the disease (Study). CMS approved the Study for coverage under the Medicare program, meaning that Medicare will cover the cost of the implantable device as well as the implantation procedure, treatment of any complications from the implantation procedure, routine pre-operative and follow-up care, and clinician visits during the course of the Study for subjects in both the treatment and control groups.

Under the Proposed Arrangement, Requestor will pay cost-sharing obligations that Medicare beneficiaries participating in the Study would otherwise owe for Medicare-reimbursable items and services provided during the Study. Such costs will be paid directly to the person or entity to whom the subject would owe the amount. Medicare beneficiaries will not incur out-of-pocket expenses relating to their participation in the Study. Requestor proposed that the Proposed Arrangement would serve a dual function of reducing financial barriers to enrollment in the Study (i.e., allowing greater participation from a broader range of potential subjects) and preserving the blinding of subjects.

Requestor certified that neither Requestor nor its investigators nor its third-party recruitment partners would advertise 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 the point at which most subjects would learn of them.


OIG determined that the Proposed Arrangement could generate prohibited remuneration under the Anti-Kickback Statute 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:

  1. The Proposed Arrangement is part of a clinical study that has been developed in consultation with, and approved by, CMS.

  2. The Proposed Arrangement would pose a low risk of overutilization or inappropriate utilization of federal healthcare program items and services.

  3. The Proposed Arrangement is distinguishable from problematic seeding arrangements, such as those in which manufacturers initially offer subsidies to lock in future utilization of a reimbursable item or service.

As is typical, OIG stated that Advisory Opinion No. 21-17 is limited in scope to the Proposed Arrangement. However, this opinion provides guidance as to how OIG might respond to similar requests. OIG Advisory Opinion No. 21-17 is available here.

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