oig guidance on patient assistance programs

In the 2005 guidance, OIG provided an outline for structuring independent charities that avoid anti-kickback violations. The increased scrutiny to patient assistance programs will probably mean fewer patients will receive cutting edge medicine and be forced to receive older medications.

Full Answer

What is the OIG’s guidance on PAP fraud and abuse?

In 2005, the OIG issued additional guidance in a special advisory bulletin that considered fraud and abuse concerns associated with PAPs.

What does the new OIG regulation mean for beneficiary inducement?

OIG’s new regulation interprets the changes made to the beneficiary inducement provisions of the CMP by the Affordable Care Act (ACA).

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.

Does OIG consider gift cards to be cash?

However, OIG would not consider “gift cards that can be redeemed only at certain stores for a certain purpose, like a gasoline gift card” as cash or cash equivalents. When providing gift cards, providers should be particularly mindful that OIG’s threshold for nominal non-cash gifts is $15 per gift and $75 per beneficiary annually.

What is PAP in Medicare?

Who is the Inspector General of HHS?

Can pharmaceutical companies make donations to PAPs?

Can OIG prevent Medicare from helping uninsured patients?

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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.

Who is the OIG?

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.

What happens if assistance is available only for the highest cost drugs?

If assistance is available only for the highest-cost drugs, patients may be steered to those pharmaceuticals rather than to equally effective, lower-cost alternatives . If, instead, assistance is available for a broader range of equally effective treatments, patients, and their prescribers, have greater freedom of choice.

What is Supplemental Bulletin?

The Supplemental Bulletin provides guidance on what OIG considers to be key safeguards to ensuring a charity's independence from its donors. OIG will work with charities that previously received favorable advisory opinions to ensure that their operations are consistent with current guidance.

Can a charity be a conduit for a drug manufacturer?

If, however, a charity acts as a conduit for a drug manufacturer to induce the prescription of its drugs, Federal health care programs and their beneficiaries are put at risk. OIG will therefore closely scrutinize PAPs that do not appear sufficiently independent from their donors," said Inspector General Daniel R. Levinson.

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.

What is a per discharge rate for a drug?

When inpatient hospitals infuse the drug, they receive a per-discharge payment rate based on the Medicare Severity Diagnosis Related Group (MS-DRG) to which the discharge is assigned. In addition to this payment, hospitals may also receive a New Technology Add-On Payment (NTAP) that will vary based on a hospital’s total inpatient covered charges and overall cost-to-charge ratio.

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.

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 .

How to reduce fraud and abuse exposure?

In addition to taking steps to transition beneficiaries to other programs, pharmaceutical manufacturer PAPs can reduce their fraud and abuse exposure by taking one or more of the following steps: (i) Adjusting financial need criteria to reflect the lower drug costs incurred by Part D enrollees ( i .e., liability for premiums and cost-sharing amounts only, instead of the total cost of the drugs); (ii) where possible , subsidizing other drugs in the same class as the manufacturer's products covered by the PAP if a beneficiary's physician prescribes an alternate product; and (iii) checking CMS eligibility files, to the extent available , on a reasonably regular basis to determine whether PAP patients have enrolled in Part D and should be transitioned to other assistance programs. Occasional, inadvertent cost-sharing subsidies provided to a Part D enrollee should not be problematic ( 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). Notwithstanding a pharmaceutical manufacturer's compliance with the foregoing, the Government will take enforcement action in cases where there is evidence of unlawful intent.

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.

Does Part D cover uninsured patients?

Nothing in the Part D program or in any OIG laws or regulations prevents pharmaceutical manufacturers or others from providing assistance ( e.g., through cash subsidies or free drugs) to uninsured patients. Nothing in this Bulletin impacts programs that assist uninsured patients.

What is the OIG opinion on Caring Voice?

The Office of Inspector General’s (OIG) advisory opinion protected Caring Voice Coalition from liability under the Anti-Kickback Statute for its work providing financially needy Medicare patients with premium and cost-sharing assistance. Drug companies are the primary donors to almost all charity patient assistance programs (PAPs), including Caring Voice Coalition, while some drug companies also create their own charity PAPs. The OIG’s 2006 opinion issued to Caring Voice Coalition was fact-specific, as are all advisory opinions, and in this case was predicated on commitments the charity made to implement certain safeguards regarding contributions from donors and grants to beneficiaries.

What is the OIG CIA?

The December 2017 OIG CIA was announced as part of a settlement between United Therapeutics and the Department of Justice (DOJ), which alleged that United Therapeutics induced patients to purchase its drugs by donating to charity PAPs over which it exerted some control.

What is the alleged violation of the OIG?

According to the OIG, the alleged violations “materially increased the risk that [the charity] served as a conduit for financial assistance from a [drug company] donor to a patient,” and thus increased the risk that the charity’s Medicare patients would be steered to that company’s federally reimbursable drugs.

Is Caring Voice Coalition offering financial assistance?

Last week, one of the largest charity patient assistance programs in the country, Caring Voice Coalition, announced that it would not be offering financial assistance for any of its disease funds in 2018.

Is United Therapeutics in the CIA?

Subsequent to entering the CIA with United Therapeutics, and on the same day Caring Voice Coalition announced it would not offer financial assistance in 2018, OIG released a letter it sent to a drug company trade group, dated January 4, 2018.

What is OIG access to care?

Access to Care: OIG interprets “promoting access to care” as “improving a particular beneficiary’s, or a defined beneficiary population’s, ability to obtain items and services payable by Medicare or a State health care program.” OIG explained that its interpretation encompasses providing the tools necessary for removing “socioeconomic, educational, geographic, mobility, or other barriers that could prevent patients from seeking care (including preventive care) or following through with a treatment plan.”

What is care OIG?

Care: OIG defines “ care” in “access to care” as “access to items and services that are payable by Medicare or a state health care program for the beneficiaries who receive them.” This means that the exception may not cover remuneration that encourages beneficiaries to access services that could promote general wellness, unless those services are covered by the individual’s Medicare or state health care program benefit. This “care” limitation may result in some incentives being permissible in some states but not others depending on the applicable Medicaid scope of benefits or differences between Medicare Advantage plan benefits.

What is the OIG regulation?

OIG’s new regulation interprets the changes made to the beneficiary inducement provisions of the CMP by the Affordable Care Act (ACA). The CMP prohibits offering “remuneration” to individuals eligible for federal health care program benefits that the offeror knows or should know are likely to influence beneficiaries’ selection of particular providers, practitioners or suppliers. The ACA added an exception to permit “certain remuneration that poses a low risk of harm and promotes access to care.”

How does remuneration help patients?

In the first two examples, OIG notes that these forms of remuneration promote access to care by preparing both the patient and the physician for follow-up care. Example (1) “would help the patient understand and manage the interaction between lifestyle, disease, and prescribed treatment and create a record that would facilitate interactions with the physician for future care-planning.” Example (2) “increases the beneficiary’s ability to capture information necessary for follow-up care and to comply with the treatment plan.” Both examples facilitate patient-physician communication, as one equips the patient with resources that allow for informed decision-making and compliance, and the other offers the physician easier access to the information necessary for providing quality care. OIG endorses Example (3) because “ [the item] is a tool that enables the patient to access the right drugs at the appropriate dosage and time” and, as such, may reduce errors associated with the patient misremembering or misunderstanding physicians’ instructions.

Why does OIG endorse example 3?

OIG endorses Example (3) because “ [the item] is a tool that enables the patient to access the right drugs at the appropriate dosage and time” and, as such, may reduce errors associated with the patient misremembering or misunderstanding physicians’ instructions. Remember: cash or “cash equivalents” are unacceptable.

What is a safe zone for a physician?

Facilitating patient-physician communication or compliance with a treatment plan is a safe zone. The new rule favors remuneration that acts to improve patient-physician communication and the patient’s involvement in managing their care and health conditions, with the apparent goal of better health outcomes. OIG provides three examples: (1) a primary care group practice’s purchase of a subscription to a Web-based food and activity tracker that offers information about healthy lifestyles for its diabetic patients; (2) a hospital sending its patients home with inexpensive devices that record data (such as weight or other vitals) that is then transmitted to the hospital or primary care provider; and (3) providing patients with an item that dispenses medications at a certain time at the correct dosage.

When did the OIG release the AO?

In December 2016, the Office of Inspector General of the US Department of Health and Human Services (OIG) issued a final regulation implementing new “safe harbors” for certain patient incentive arrangements and programs, and released its first Advisory Opinion (AO) under the new regulation in March 2017.

When did the OIG change its advisory opinion?

Beginning in December 2015, the OIG modified five Advisory Opinions in order to update the analyses pursuant to certifications received. [9]

What is the OIG opinion on CVC?

In December 2015, the OIG published a Modified Advisory Opinion 06-04, following the OIG’s request that CVC certify compliance with the additional factors outlined in the 2014 Special Advisory Bulletin. The Modified Advisory Opinion stated that CVC had certified compliance to each additional factor, and further that CVC had proposed additional modifications to its current operations. [13] The OIG concluded in the Modified Advisory Opinion 06-04 that CVC’s PAP was sufficiently low risk and the OIG would not impose CMPs or sanctions on CVC under the AKS.

What is the rescission of advisory opinion 06-04?

Senate Finance Committee regarding the rescission of Advisory Opinion 06-04, including how the OIG came to learn about the misrepresentations that the charity made, and whether the OIG plans to audit or review other PAPs and similar advisory opinions.

What is a rescinded OIG letter?

However, on November 28, 2017, the OIG issued a letter rescinding Advisory Opinion 06-04 (“Rescission Letter”), based on the charity’s “failure to fully, completely, and accurately disclose all relevant and material facts to OIG,” and CVC’s alleged failure to comply with certain factual certifications made to the OIG. Specifically, the OIG states that it determined that the charity “provided patient-specific data to one or more donors that would enable the donor (s) to correlate the amount and frequency of their donations with the number of subsidized prescriptions or orders for their products, and (ii) allowed donors to directly or indirectly influence the identification or delineation of Requestor’s disease categories.” [14] The Rescission Letter indicates that CVC’s failure to comply with the certifications “materially increased the risk” that CVC served as a conduit for financial assistance from a drug manufacturer donor to a patient, and thus inappropriate steerage to the donor’s drugs.

What should stakeholders do with PAPs?

Stakeholders should also closely monitor federal and state legislative policy developments regarding PAPs, including copayment assistance and product coupons. K&L Gates regularly advises clients on health care fraud and abuse risk mitigation and compliance matters and facilitate stakeholder engagement with Congress and state legislators and HHS.

What are the two aspects of PAP?

The OIG has indicated that PAPs generally have two “remunerative aspects” that require scrutiny under the AKS: i) donor contributions , which the OIG stated can be analyzed as indirect remuneration to patients , and ii) financial assistance remuneration provided directly to patients. The OIG states that the AKS could be violated “if a donation is made to a PAP to induce the PAP to recommend or arrange for the purchase of the donor’s federally reimbursable items,” as well as if a PAP’s grant of financial assistance to a patient is made “to influence the patient to purchase (or induce the patient’s physician to prescribe) certain items.” [5]

What is the purpose of PAPs?

Department of Health and Human Services (“HHS”) Office of the Inspector General (“OIG”) has continually acknowledged that properly structured PAPs can provide important “safety net assistance” to patients with limited financial means who cannot afford necessary drugs. This Client Alert provides a comprehensive review ...

Why are PAPs important?

Historically, the OIG has treated PAPs as important safety nets for patients who face chronic illnesses and high drug costs. The OIG issued a special advisory bulletin (SAB) in 2005 confirming that PAPs could help ensure patients had access to and could afford their medically necessary drugs. The OIG’s guidance evolved with its May 2014 SAB, which addressed the growing trend of independent charity PAPs establishing or operating specific disease funds that limit assistance to a subset of available products. The OIG articulated a concern with such PAPs, and indicated that it would view such programs as having a higher baseline risk of abuse when their assistance was limited to only a subset of available FDA-approved products for treatment of the disease. The OIG advised PAPs to define disease funds in accordance with widely recognized clinical standards and in a manner that covered a broad spectrum of products and manifestations of the disease ( e.g., without reference to specific symptoms, drug stages, treatment types, severity of symptoms or other “narrowing” factors).

Can PAPs be used to subsidize drug purchases?

As PAPs have the potential to be used by manufacturers to subsidize the purchase of their own products, or to improperly steer a patient’s drug selection, they can trigger scrutiny under the federal Anti-Kickback Statute (AKS) and Beneficiary Inducement Civil Monetary Penalty (CMP), among other laws.

What is the OIG in PAP?

First, the OIG highlighted the autonomy of the charitable organization, the non-affiliation with any Donor, and the inability of any Donor to exert direct or indirect control or influence over the charitable organization or the Program. The requestor’s independent discretion to use donations was apparent in the facts discussed above, and the inability of Donors or their affiliates to influence the board of directors was adequately protected. Second, the OIG highlighted that under the requestor's PAP, patients must have selected their provider, practitioner, or supplier and have a treatment regimen in place prior to applying for benefits, and remain free to change them while receiving assistance. Further protection is found in the requestor certifying that it would not make referrals or recommendations to patients.

What are the protections afforded by the OIG?

First, eligibility decisions would be based solely on financial need, according to uniform standards applied consistently, without regard for the identity of the provider, practitioner, supplier, drug, device, referring party, or any Donor. Second, patients must have their provider, practitioner, or supplier, and their treatment plan, in place prior to applying for assistance (which the patient remains free to change while receiving assistance), and would receive support on a first-come, first-served basis. Eligibility decisions would not be based on whether the provider, practitioner, or supplier is a Donor, and the requestor would not make any referrals or recommendations or share Donor identities with patients. For these reasons, the OIG found the Program presented a low risk of fraud and abuse.

What is the OIG opinion 15-06?

In approving these disease funds, the OIG stressed the importance of the protection built into the arrangement, including the board of director independence from donors, strict limits on the involvement of donors and anyone related to them, the patients’ freedom of choice to switch providers and suppliers, and the requirement that patients select their providers and suppliers and have a treatment plan in place before applying to the PAP for assistance. Advisory Opinion 15-06 thus provides another concrete example of the type of PAP arrangement that the OIG is willing to approve.

What is the OIG's conclusion on donor contributions?

As to Donor contributions to the requestor, the OIG concluded that the design and administration of the Program presented minimal risk and would provide sufficient insulation to prevent assistance decisions being influenced by the Donors. The OIG based its analysis on four aspects of the arrangement that provide protection.

What are the two main aspects of the proposed arrangement?

As discussed below, the OIG considered two main aspects of the proposed arrangement: (1) Donor contributions to the requestor; and (2) the requestor’s assistance to patients.

What is OIG advisory opinion?

Department of Health & Human Services, Office of Inspector General (OIG) issued an advisory opinion approving a charitable organization’s proposal to provide financial assistance to individuals with chronic diseases by assisting with the costs of health insurance and drug and device therapies. In Advisory Opinion 15-06, the OIG drew upon its past guidance regarding patient assistance programs (PAPs) to approve an arrangement operated by a charity that involves disease funds under certain carefully defined parameters.

Can a requestor refer a patient to a physician?

The requestor would not refer patients or recommend or arrange for the use of any practitioner, provider, supplier, drug or device. Patients would use a benefit card at the patients' preferred pharmacy or device distributer if treatment is self-administered. Where treatment is physician-administered, the requestor would provide assistance directly to the patient’s physician or hospital, or directly to the patient (upon verification) if the physician or hospital does not accept third-party payments or the benefit card.

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 .

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 ...

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.

I. Introduction

• Patient assistance programs (PAPs) have long provided important safety net assistance to patients of limited means Start Printed Page 70624who do not have insurance coverage for drugs, typically serving patients with chronic illnesses and high drug costs. PAPs are structured and operated in many different ways. PAPs may offer cash subsidies, free o...

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II. The Federal Anti-Kickback Statute

III. Patient Assistance Programs

IV. Bulk Replacement Models