On Jan. 15, 2020, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued Advisory Opinion No. 20-02 which addresses whether a pharmaceutical manufacturer providing financial assistance to patients constitutes grounds for the imposition of sanctions under the civil monetary penalty provision prohibiting inducements to beneficiaries, section 1128A (a) (5) of the Social Security Act (the Act), the exclusion authority at section 1128 (b) (7) of the Act or the civil monetary penalty provision at section 1128A (a) (7) of the Act.
Full Answer
What does the OIG say about Paps?
In numerous prior advisory opinions, the OIG has approved charitable programs that can help financially needy beneficiaries with health care expenses. In 2005, the OIG issued additional guidance in a special advisory bulletin that considered fraud and abuse concerns associated with PAPs.
When did the OIG issue the supplemental special advisory bulletin?
On May 30, 2014, the OIG issued a supplemental special advisory bulletin regarding Independent Charity Patient Assistance Programs, which updated the 2005 special advisory bulletin.
How can a PAP provide assistance to Part D enrollees?
PAPs can provide assistance to Part D enrollees and interface with Part D plans by operating "outside the Part D benefit" to ensure separateness of Part D benefits and PAP assistance. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP).
What is the requestor’s role under the caregiver assistance arrangement?
Under the arrangement, the requestor assists eligible patients, between the ages of 18-25 years old, and up to two caregivers with travel, lodging, meals and certain out-of-pocket expenses they incur during and after the patient’s drug infusion. For patients 26 and older, the requestor provides the same support for a patient and one caregiver.
Who is the Inspector General of HHS?
What is PAP in Medicare?
Can pharmaceutical companies make donations to PAPs?
Can OIG prevent Medicare from helping uninsured patients?
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About this website
What does the OIG assist with in the healthcare industry?
Since its 1976 establishment, the Office of Inspector General (OIG) has been at the forefront of the Nation's efforts to fight waste, fraud and abuse and to improving the efficiency of Medicare, Medicaid and more than 100 other Department of Health & Human Services (HHS) programs.
How do I get an OIG advisory opinion?
Submit a request Advisory opinion requests must be submitted in PDF format to [email protected]. Although not required, we encourage requestors to use the OIG Advisory Opinion Request Template to prepare advisory opinion requests.
What does HHS OIG stand for?
Office of Inspector General'sThe U.S. Department of Health and Human Services (HHS) Office of Inspector General's (OIG) mission is to protect the integrity of HHS programs as well as the health and welfare of program beneficiaries.
What are OIG advisory opinions?
An Office of Inspector General (OIG) advisory opinion is a legal opinion issued by OIG to one or more requesting parties about the application of the OIG's fraud and abuse authorities to the party's existing or proposed business arrangement.
What are government enforcement actions?
Criminal, civil or administrative legal actions relating to fraud and other alleged violations of law, initiated or investigated by OIG and its law enforcement partners.
Why can courts not give advisory opinions?
Federal courts cannot issue advisory opinions because of the Constitution's case-or-controversy requirement. State courts are not subject to the Constitution's case or controversy requirement and are therefore free to issue advisory opinions so long as their state constitutions allow.
How does OIG investigate?
OIG initiates investigations based on information received from a variety of sources, including: OIG's fraud, waste and abuse hotline; Departmental, GAO, and DOJ referrals; Congressional requests; and referrals from OSC regarding whistleblower disclosures.
What is the purpose of the OIG?
According to the Inspector General Act of 1978, as amended, the Inspector General's mission is to: Conduct independent and objective audits and investigations relating to DHS programs and operations. Promote economy, efficiency, and effectiveness in DHS programs and operations.
What are the 3 statutory goals of an OIG?
We have three clear goals: (1) fight fraud, waste, and abuse, (2) promote quality, safety, and value in HHS programs and for HHS beneficiaries, and (3) advance excellence and innovation.
What are the Anti-Kickback safe harbors?
Anti-Kickback Laws and Safe Harbor Regulations The safe harbor regulations define payment and business practices that will not be considered kickbacks, bribes, or rebates that unlawfully induce payment by Medicare or Medicaid programs.
What is AKS in healthcare?
The federal Anti-Kickback Statute (AKS) (See 42 U.S.C. § 1320a-7b.) is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of business reimbursable by federal health care programs.
What is an advisory opinion in law?
An advisory opinion is an interpretation of the law as it applies to a set of facts provided in writing by the individual requesting the opinion. The purpose of an advisory opinion is to provide guidance to an official or employee before the official or employee engages in an action that may be prohibited.
What is an advisory opinion in law?
An advisory opinion is an interpretation of the law as it applies to a set of facts provided in writing by the individual requesting the opinion. The purpose of an advisory opinion is to provide guidance to an official or employee before the official or employee engages in an action that may be prohibited.
What is AKS in healthcare?
The federal Anti-Kickback Statute (AKS) (See 42 U.S.C. § 1320a-7b.) is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of business reimbursable by federal health care programs.
What are the Anti-Kickback safe harbors?
Anti-Kickback Laws and Safe Harbor Regulations The safe harbor regulations define payment and business practices that will not be considered kickbacks, bribes, or rebates that unlawfully induce payment by Medicare or Medicaid programs.
New Special Advisory Bulletin Provides Additional Guidance on ...
A Supplemental Special Advisory Bulletin on patient assistance programs (PAPs) run by independent charities was released today by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services.
Pharmaceutical Manufacturer Patient Assistance Program Information | CMS
Pharmaceutical manufacturers may sponsor patient assistance programs (PAPs) that provide financial assistance or drug free product (through in-kind product donations) to low income individuals to augment any existing prescription drug coverage.
HHS OIG Approves Narrowly-Tailored Patient Assistance Program
On Jan. 15, 2020, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued Advisory Opinion No. 20-02 which addresses whether a pharmaceutical manufacturer providing financial assistance to patients constitutes grounds for the imposition of sanctions under the civil monetary penalty provision prohibiting inducements to beneficiaries, section 1128A(a)(5) of the ...
Compliance Guidance | Office of Inspector General | Government ...
Compliance Guidance. OIG has developed a series of voluntary compliance program guidance documents directed at various segments of the health care industry, such as hospitals, nursing homes, third-party billers, and durable medical equipment suppliers, to encourage the development and use of internal controls to monitor adherence to applicable statutes, regulations, and program requirements.
What is OIG opinion 20-02?
On Jan. 15, 2020, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued Advisory Opinion No. 20-02 which addresses whether a pharmaceutical manufacturer providing financial assistance to patients constitutes grounds for the imposition of sanctions under the civil monetary penalty provision prohibiting inducements to beneficiaries, section 1128A (a) (5) of the Social Security Act (the Act), the exclusion authority at section 1128 (b) (7) of the Act or the civil monetary penalty provision at section 1128A (a) (7) of the Act. These sections relate to the commission of acts described in section 1128B (b) of the Act, the federal anti-kickback statute.
What is an eligible patient?
Eligible patients are patients who have been prescribed the drug for an FDA-approved indication and have a household income that does not exceed 600 percent of the federal poverty level, who live more than two hours driving distance or 100 miles from the nearest center accepting patients and who have no insurance for non-emergency medical travel. The requestor offers the arrangement to eligible patients regardless of their provider or insurance status. To participate in the arrangement, the patient and caregiver (s) must agree not to request reimbursement from federal health care programs for costs covered under the arrangement. The requestor certified that it does not bill or otherwise shift the costs of the arrangement to the federal health care programs.
What is a drug infusion requestor?
Under the arrangement, the requestor assists eligible patients, between the ages of 18-25 years old, and up to two caregivers with travel, lodging, meals and certain out-of-pocket expenses they incur during and after the patient’s drug infusion. For patients 26 and older, the requestor provides the same support for a patient and one caregiver. The requestor does not provide assistance with patient travel or expenses associated with initial patient consultations, leukapheresis or follow-up visits beyond the post-infusion monitoring required by the drug’s prescribing information. The requestor does not authorize lodging under the arrangement to a patient treated by a center when the requestor has knowledge that the patient is eligible to receive lodging from the center, and such lodging is available for that patient’s use. The requestor also certified that it does not advertise the arrangement. Patients do not learn about, or become eligible for, the arrangement until they have been diagnosed with the appropriate disease and are prescribed treatment with the drug. Under the arrangement, the requestor provides reimbursement for gas and tolls or arranges for transportation via bus, rail, rental car or air travel for a patient and caregiver (s) to and from the closest center accepting patients using a third-party travel vendor.
How long does a patient have to be monitored after an infusion?
Patients receive assistance for four weeks post-infusion; however, if the patient’s physician determines that it is medically necessary to monitor the patient for risks of negative outcomes for longer than four weeks , the requestor provides assistance for the duration of monitoring deemed necessary by the physician.
Can the OIG impose administrative sanctions?
The OIG advised that it will not impose administrative sanctions under the above-listed sections of the Act for the specific scenario described but noted that similar circumstances could create prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals of federal health care program business were present.
Does a requestor authorize lodging under an arrangement?
The requestor does not authorize lodging under the arrangement to a patient treated by a center when the requestor has knowledge that the patient is eligible to receive lodging from the center, and such lodging is available for that patient’s use. The requestor also certified that it does not advertise the arrangement.
Do you have to agree to reimburse for a health care arrangement?
To participate in the arrangement, the patient and caregiver (s) must agree not to request reimbursement from federal health care programs for costs covered under the arrangement. The requestor certified that it does not bill or otherwise shift the costs of the arrangement to the federal health care programs.
What is the OIG recommendation for PAPs?
OIG recommends that Independent Charity PAPs determine eligibility according to a reasonable, verifiable, and uniform measure of financial need that is applied in a consistent manner.
What is OIG in pharmaceuticals?
OIG states that pharmaceutical manufacturers and their affiliates should not exert any direct or indirect influence or control over the charity or its assistance program. They split their guidance up into three categories of particular concern: (1) Disease Funds; (2) Eligible Recipients; and (3) Conduct of Donors. We have made a chart highlighting the takeaways from each section.
What is a PAP subsidy?
A subsidy for copayments provided by a pharmaceutical manufacturer through a PAP may implicate the Beneficiary Inducements CMP if the subsidy is likely to influence a Medicare beneficiary’s selection of a particular provider, practitioner, or supplier. An example would be where companies make eligibility dependent on the patient’s use of certain prescribing physicians or certain pharmacies to dispense the drugs. The penalty is meant to discourage companies who induce beneficiaries to use their product through any sort of transfer of value.
What does increased scrutiny mean for patient assistance?
The increased scrutiny to patient assistance programs will probably mean fewer patients will receive cutting edge medicine and be forced to receive older medications. This may be alright for some chronic diseases, but for cancer patients and those who do not tolerate certain medications this could prove to be disastrous.
Does OIG require disease funds?
Thus, OIG requires disease funds not be defined for the purpose of limiting the drugs for which the Independent Charity PAP provides assistance. OIG recommends disease funds be defined in accordance with widely recognized clinical standards and in a manner that covers a broad spectrum of products.
What is the OIG opinion 20-05?
In AO 20-05, an unusually lengthy opinion, the OIG sets forth in detail its concerns regarding the provision of financial assistance by pharmaceutical companies to Part D beneficiaries who cannot afford their out-of-pocket copay and other expenses. The key to the OIG’s legal analysis is its broad interpretation of the term “induce” as used in the Anti-Kickback Statute. The OIG appears to take the position that copay assistance “induces” a beneficiary to purchase a medication when the assistance removes a financial barrier, even if the medication is one that the beneficiary indisputably needs and would have purchased if he or she had the financial means to do so. The OIG’s interpretation of “induce” is likely to be tested in one or more pending cases in federal court.
Why did the OIG conclude that the proposed Subsidy Program differed materially from permissible?
The OIG concluded that the proposed Subsidy Program differed materially from permissible company donations to independent copay assistance foundations because the Subsidy Program provided remuneration to Medicare beneficiaries to induce them to purchase an item or service for which payment may be made under a federal health care program. The OIG reasoned that, where a Medicare beneficiary otherwise may be unwilling to or unable to purchase the Requestor’s medications due to the beneficiary’s cost-sharing obligations, the Subsidy Program would “induce” the beneficiary to purchase the medications by removing the financial impediment:
What is AO 20-05?
On September 23, 2020, the Office of Inspector General of the United States Department of Health and Human Services (OIG) publicly released Advisory Opinion 20-05 (AO 20-05), a significant, adverse opinion rejecting a proposal by a pharmaceutical manufacturer to provide copay assistance to Medicare Part D beneficiaries who were prescribed medications that the company manufactures. The OIG opined that the proposed program was “highly suspect” under the Federal Anti-Kickback Statute and was likely to induce patients to purchase the company’s products reimbursed under Part D.
What would happen if the Subsidy Program was adopted?
According to the OIG, if the Subsidy Program were adopted, physicians might be swayed to prescribe the Requestor’s drug even if cheaper or lower-cost and equally effective therapies happened to be available or became available in the future.
Does copay assistance induce a beneficiary to purchase a medication?
In sum, although not stated in these exact terms, it appears that the OIG has taken the position that copay assistance “induces” a beneficiary to purchase a medication when the assistance removes a financial barrier, even if the medication is one that the beneficiary indisputably needs and would have purchased if he or she had the financial means to do so.
Does the proposed arrangement involve providing remuneration to physicians to induce them to prescribe the Requestor's drug?
The OIG also noted that although the Proposed Arrangement did not involve providing remuneration to physicians to induce them to prescribe the Requestor’s drug covered by Part D, the availability of copay assistance for patients could influence physician treatment decisions. 2 While the OIG emphasized that it is not inappropriate for a physician to consider costs to patients when making prescribing decisions, the OIG expressed concern that physician decision-making could be skewed. According to the OIG, if the Subsidy Program were adopted, physicians might be swayed to prescribe the Requestor’s drug even if cheaper or lower-cost and equally effective therapies happened to be available or became available in the future.
Does the subsidy program increase Medicare costs?
According to the OIG, the Subsidy Program would increase costs to Medicare by effectively eliminating beneficiary copayments, which the OIG described as “one of the key pricing controls” and a “key market constraint” that Congress included in the Part D program. In this context, the OIG expressed concern regarding the high list price set by the Requestor and stated that the “facts and circumstances here suggest” that the Subsidy Program may be “critical” to the Requestor’s ability to keep its price at a high level.
What is OIG guidance?
OIG periodically develops and issues guidance, including Special Advisory Bulletins, to alert and inform the health care industry about potential problems or areas of special interest. This Federal Register notice sets forth the recently issued OIG Special Advisory Bulletin addressing patient assistance programs for Medicare Part D enrollees.
Why is it important for PAPs to provide free drugs outside of Part D?
In addition, to promote quality of care, we believe it would be important for PAPs that provide free drugs outside the Part D benefit to coordinate effectively with Part D plans so that the plans can undertake appropriate drug utilization review and medication therapy management program activities .
What is cost sharing in PAP?
Cost-sharing subsidies offered by a pharmaceutical manufacturer PAP to the dispensing supplier differ in two important respects from a provider's or supplier's unadvertised, non-routine waiver of cost-sharing amounts based on a patient's financial need, which has long been permitted. First, the subsidies result in the dispensing supplier receiving full payment for the product and avoiding the risk of non-collection, thus providing the supplier with an economic incentive to favor the subsidized product and a disincentive to recommend a lower-cost alternative, such as a generic. In addition, the availability of PAP assistance is typically advertised and may influence a beneficiary's choice of product (through the prescribing physician acting on behalf of the beneficiary). Moreover, once a beneficiary is enrolled in a pharmaceutical manufacturer PAP, the beneficiary is effectively locked into using the pharmaceutical manufacturer's product, since the beneficiary risks losing financial assistance if he or she switches products, even if an equally effective, but less expensive, product would be in his or her best medical interests.
What are the issues with PAPs?
Analytically, pharmaceutical manufacturer PAPs raise two main issues in connection with the Part D program: (i) Whether subsidies they provide can count toward a Part D enrollee's true out-of-pocket costs (known as the TrOOP); and (ii) whether the subsidies implicate the Federal anti-kickback statute. [ 7]
Do PAPs have to disenroll Medicare?
PAPs need not disenroll all Medicare beneficiaries from their existing PAPs to be compliant with the fraud and abuse laws. Enrollment in Part D is voluntary; therefore, existing PAPs may continue to provide free or reduced price outpatient prescription drugs to Medicare beneficiaries who have not yet enrolled in Part D. The Centers for Medicare & Medicaid Services (CMS) anticipates instituting procedures that will help PAPs determine if PAP clients have enrolled in Part D.
Can a pharmacy waive cost sharing?
Financial need-based waivers that meet these criteria have long been permitted. [ 4] However, a pharmacy has not waived a cost-sharing amount if the amount has been paid to the pharmacy, in cash or in kind, by a Start Printed Page 70625 third party (including, without limitation, a PAP).
Is PAP a part D subsidy?
Occasional, inadvertent cost-sharing subsidies provided by a pharmaceutical manufacturer PAP to a Part D enrollee should not be problematic under the anti-kickback statute ( e.g., where, despite due diligence, a pharmaceutical manufacturer PAP does not know and should not have known that a beneficiary has enrolled in Medicare Part D).
Who is the Inspector General of HHS?
202-619-0088. Washington, DC – HHS Inspector General Daniel R. Levinson today released a Special Advisory Bulletin providing guidance on the application of OIG fraud and abuse laws to patient assistance programs (PAPs) that offer assistance in obtaining outpatient prescription drugs to financially needy Medicare beneficiaries who enroll in ...
What is PAP in Medicare?
As explained in the Bulletin, arrangements through which a pharmaceutical manufacturer would use a PAP it operates or controls to subsidize its own products that will be payable by Medicare Part D present a heightened risk of fraud and abuse .
Can pharmaceutical companies make donations to PAPs?
For example, the Bulletin, reflecting long-standing OIG guidance, makes clear that pharma ceutical manufacturers can make cash donations to bona fide independent charity PAPs that are not affiliated with a manufacturer and operate without regard to donor interests, providing appropriate safeguards exist. These programs are typically operated by patient advocacy and support organizations.
Can OIG prevent Medicare from helping uninsured patients?
Finally, the Bulletin makes clear that nothing in any OIG laws or regulations prevents pharmaceutical manufacturers or others from helping uninsured patients and Medicare beneficiaries who have not enrolled in Part D with their outpatient prescription drugs.
