OIG Issues Four Advisory Opinions

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From December 23, 2020 through December 31, 2020, the OIG issued several advisory opinions. The advisory opinions analyzed (1) a program for a pharmaceutical manufacturer to provide financial assistance to certain patients, (2) a proposal from a qualified health center to offer gift cards to incentivize certain patients to attend preventative appointments, (3) a proposed web-based platform where health care facilities and clinicians could remit to patients and payors a portion of claims for which payment may be made by the Medicare program as a secondary payor, and (4) a management company’s provision of below fair market value Medicaid enrollment application assistance services and affiliated skilled nursing facilities’ payments for those services.

Advisory Opinion 20-09

The requestor is a pharmaceutical manufacturer which manufactures an FDA-approved and potentially curative therapy that is individually produced for each patient (Drug). The manufacturing process involves multiple steps, including: (1) leukapheresis, whereby certain cells are removed from the patient’s body; (2) the cells are shipped to the requestor’s manufacturing facility where the cells are engineered to include the DNA for a particular protein which is inserted into the patient’s T-cells; and (3) the cells are then shipped to the treating facility where they are infused back into the patient’s bloodstream to treat the disease. Treatment with this therapy requires that the patient make one visit to a leukapheresis facility or an inpatient/outpatient facility (Center), in addition to a second visit to a Center where the patient undergoes chemotherapy, Drug infusion, and post-infusion monitoring. In accordance with the Risk Evaluation and Mitigation Strategy (REMS), the physicians and other health care staff at the Centers must instruct the patient to stay within two hours of the administering Center for at least four weeks after the Drug infusion.

The requestor assists eligible patients and one caregiver with travel, hotel lodging, and certain out-of-pocket expenses that are incurred during leukapheresis, chemotherapy, infusion and monitoring. Based on the facts certified by the requestor, the OIG concluded that although the arrangement could potentially generate prohibited remuneration under the Federal anti-kickback statute, the OIG will not impose administrative sanctions under sections 1128(b)(7) or 1128A(a)(7) of the Act, or under section 1128A(a)(5) of the Act. The OIG’s determination was based upon the following reasons:

  • The remuneration is intended to assist indigent and rural patients stay in proximity to a Center for Drug treatment. Indigent patients may be disproportionately impacted by health risks or death if they are unable to travel and stay in proximity to a center to receive the Drug and necessary post-treatment monitoring.
  • The modest lodging provided by the requestor enables physicians to meet the FDA requirements in the Drug’s prescribing information and mitigate patient harm from potentially lethal Drug side effects.
  • The Drug’s safety risks, and the requestor’s assurance that any facility that meets all REMS requirements and the requestor’s uniform criteria may participate in the arrangement, limit the likelihood that the requestor uses the arrangement to reward a limited number of prescribers who prescribe and administer its Drug.
  • The Drug is a treatment of last resort and is a one-time, potentially curative treatment, so the arrangement does not pose a risk of inducing patients to continue purchasing the drug when it would be payable by a Federal health program. In addition, the requestor does not advertise the arrangement, reducing the likelihood that the arrangement serves as a marketing tool to drive patients to the requestor’s Drug.
  • The assistance under the arrangement does not duplicate other charitable assistance, as patients cannot receive lodging under the arrangement if they are eligible for other free lodging from a Center.
  • There is no existing authority permitting the Secretary to pay for the travel and lodging for patients receiving the Drug. The requestor’s arrangement would enable an eligible patient and caregiver to follow the requirements of the Drug’s prescribing information.
  • While the arrangement implicates the Beneficiary Inducements CMP, the renumeration for travel, lodging and certain out-of-pocket expenses satisfies the Promotes Access to Care Exception.

A copy of Advisory Opinion 20-09 is available here.

Advisory Opinion 20-08

The requestor, a 501(c)(3) nonprofit community health center that serves predominantly low-income individuals, sought to incentivize pediatric patients (Eligible Patients) who have previously missed two or more preventative and early intervention care appointments (Care Appointments) with requestor. Under the proposed arrangement , the requestor would: (1) contact the Eligible Patients or their parents or guardians who have missed two or more previously scheduled Care Appointments with Requestor in the past six months (Eligible Patients); (2) notify such Eligible Patients of the opportunity to receive a $20 gift card from the requestor upon rescheduling and attending a Care Appointment; and (3) furnish the gift card at checkout after the Eligible Patient attends the Care Appointment.

Based on the facts certified by the requestor, the OIG concluded that although the arrangement could potentially generate prohibited remuneration under the Federal anti-kickback statute, the OIG would not impose administrative sanctions under sections 1128(b)(7) or 1128A(a)(7) of the Act in connection with the arrangement. The OIG additionally concluded that the arrangement would not constitute grounds for the imposition of civil monetary penalties under section 1128A(a)(5) of the Act. The OIG’s determination was based upon the following reasons:

  • The risk of inappropriate patient steering is minimized due to a narrowly defined pool of Eligible Patients.
  • The risk that the gift card would induce Eligible Patients to select the requestor for future Care Appointments is low, because the arrangement would: (1) be available only to a patient who has previously scheduled a Care Appointment at least twice with the requestor and then missed the appointments; and (2) the arrangement offers a one-time $20 gift card, even if an Eligible patient misses Care Appointments in the future.
  • The arrangement would be unlikely to lead to increased costs to Federal health care programs through overutilization or inappropriate utilization.
  • The arrangement is unlikely to harm competition, as the remuneration is of modest value and could only be furnished once. In addition, the requestor would only notify those Eligible Patients who had previously scheduled and missed two Care Appointments with the Requestor, and the requestor has certified that it would not advertise the arrangement, otherwise.
  • The arrangement is reasonably tailored to accomplish the requestor’s goal of improving attendance rates at Care Appointments.

A copy of Advisory Opinion 20-08 is available here.

Advisory Opinion 20-07

The requestor operates a web-based platform which lists all known health care facilities and clinicians with a National Provider Identifier and offers potential remittances to patients and their non-government third-party payors for diagnostic, procedural, and surgical care that is both elective and episodic. The requestor proposed establishing a separate user pathway exclusively for patients who have Medicare as a secondary payor through which: (i) providers could offer potential remittances to such patients and their third-party payors for certain services and potentially payable by the Medicare program as a secondary payor; and (ii) patients could enter into agreements with providers, whereby the patients and their third-party payors could receive a portion of the remittances from providers, after requestor deducts the portion of the remittances it would keep as a fee. Requestor also ensured that it would not charge any fees for members joining and the platform will continue to be free to members who do not ultimately receive a remittance from a provider.

Based on the facts certified by the requestor, OIG opined that although the arrangement could potentially generate prohibited remuneration under the Federal antikickback statute and constitute grounds for the imposition of sanctions under the Beneficiary Inducements CMP, the OIG would not impose administrative sanction under sections 1128A(a)(5), 1128A(a)(7), or 1128(b)(7) of the Act, based on the following:

  • The risk that the arrangement would result in increased costs to Federal health care programs through overutilization or inappropriate utilization would be low.
  • The structure of the payments would reduce the potential for overutilization or inappropriate utilization and would reduce the potential for interference with clinical decision making.
  • The arrangement would mitigate provider incentives to increase prices to induce patients to receive services.
  • The risk that the arrangement would have anti-competitive effects is low.
  • The arrangement would not steer patients to certain providers.

A copy of Advisory Opinion 20-07 is available here.

Advisory Opinion 20-06

The requestor management company provides financial, marketing, and other administrative services to skilled nursing facilities (SNFs) and home health agencies (HHAs), including two SNFs and an HHA affiliated with the management company. The management company proposed an arrangement whereby the affiliated SNFs and HHA would refer current patients, and in rare circumstances, individuals who are not yet patients but who have already selected an affiliated SNF or HHA, to the management company for the provision of Medicaid enrollment application assistance services. Such services would not involve the provision of any health care items or services. Under the arrangement, the patient would generally not pay any fees for the management company’s services if referred by an affiliated SNF. However, the patient would pay for the management company’s services if referred by an affiliated HHA. The management company also ensures that it would not target prospective patients of the affiliated SNFs, HHA or the referral sources for those entities when advertising its services, and neither the affiliated SNFs nor the HHA would advertise such services.

Based on the facts certified by the requestor, OIG opined that (i) the arrangement would not constitute grounds for the imposition of civil monetary penalties under section 1128A(a)(5) of the Act; and (ii) although the arrangement could potentially generate prohibited remuneration under the Federal anti-kickback statute, the OIG would not impose administrative sanctions on under sections 1128(b)(7) or 1128A(a)(7) of the Act, based on the following:

  • The arrangement would facilitate the Medicaid application process for individuals who otherwise may struggle to navigate the process independently or afford assistance with the process and thereby, satisfy the Promotes Access to Care Exception.
  • The arrangement’s remuneration would pose a low risk of harm by: (i) being unlikely to interfere with clinical decision making; (ii) being unlikely to increase costs to Federal health care programs or beneficiaries through overutilization or inappropriate utilization; and (iii) not raising patient safety or quality-of-care concerns.
  • The arrangement includes a number of safeguards that would sufficiently mitigate the risks of fraud and abuse and would present no more than a minimal risk of fraud and abuse under the Federal anti-kickback statute

A copy of Advisory Opinion 20-06 is available here.

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