Responding to industry stakeholder sentiment, the Office of Inspector General (OIG) for the U.S. Department of Health & Human Services (HHS) recently issued an unexpected final rule
that, effective February 10, 2022, will revise the standards governing the agency’s advisory opinion process. Specifically, the final rule—which was accompanied by an Enforcement Policy Statement Regarding OIG’s Assessment of Advisory Opinion Requests
—eliminates the procedural requirement that precludes OIG’s acceptance of an advisory opinion request and/or issuance of an advisory opinion when “the same or substantially the same course of action is under investigation or has been the subject of a proceeding involving HHS or another governmental agency.”1
This change marks the first time since 2008 that OIG has amended the advisory opinion regulations—notably, without publicly signaling that the agency was considering doing so and without notice-and-comment rulemaking.
Going forward, OIG will no longer be required (or permitted) to deny an advisory opinion request based on the pendency of an investigation or legal proceeding involving the same or substantially similar conduct. Put differently, unless another valid regulatory basis exists to reject a request or the request is ultimately withdrawn, OIG will be forced to issue an advisory opinion containing substantive legal analysis on a particular proposed course of action, notwithstanding the existence of an arguably overlapping investigation or legal proceeding.
As OIG acknowledged, this procedural requirement has been the source of considerable industry frustration, as it has frequently resulted in parties receiving rejection letters from OIG with no substantive legal analysis or transparency surrounding the purported investigation or legal proceeding cited as grounds for the rejection. According to the policy statement, OIG views this change as affording the agency greater flexibility in how to handle advisory opinion requests that previously would have been rejected, based on a careful assessment of the facts and circumstances surrounding the request.
On one hand, this final rule could represent a welcome change for health care stakeholders, to the extent it allows industry participants to interact with OIG and seek binding guidance in the form of an advisory opinion even when the government is actively investigating similar conduct. Given that False Claims Act lawsuits and other government investigations tend to drag on for multiple years, irrespective of whether the allegations ultimately have merit, this change may also facilitate timelier feedback from OIG on arrangements that happen to overlap with those at issue in an unrelated—perhaps still under seal—investigation or proceeding. Thus, in many respects this amendment represents an encouraging sign of OIG’s willingness to increase the flexibility, transparency and user-friendliness of the advisory opinion process.
At the same time, it remains to be seen whether the final rule will have any material impact on the vast majority of advisory opinion requests. It is difficult to imagine a scenario in which OIG would issue—or in which the Department of Justice, which is consulted on every advisory opinion request, would bless—a favorable advisory opinion that might negatively impact ongoing government enforcement efforts. In fact, OIG acknowledged as much in the final rule, stating that the outcome of “most advisory opinion requests” will not change based on this procedural regulatory amendment. Thus, while a pending investigation or proceeding involving the same or similar conduct may no longer lead to an automatic rejection letter from OIG in the first instance, it remains questionable how successful parties might be in obtaining anything other than an unfavorable advisory opinion under those circumstances.
As an aside, it is also notable that the final rule comes in the midst of OIG’s solicitation of comments to its request for information (RFI) on opportunities to modernize the agency’s publicly available resources. Though the RFI seeks public comments on detailed aspects of and proposed reforms to the advisory opinion process, OIG was clear that this interim procedural regulatory amendment is wholly separate from and has no impact on the actions the agency might take in response to RFI comments. Interested parties should consider submitting comments to the RFI by the January 31 deadline.
1 42 C.F.R. § 1008.15(c)(2).