oig guidance patient assistance programs

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. Past OIG Guidance Regarding PAPs

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What is OIG letter about hospital-physician incentive plans?

OIG letter regarding hospital-physician incentive plans for Medicare and Medicaid beneficiaries enrolled in managed care plans Gainsharing Arrangements and CMPs for Hospital Payments to Physicians to Reduce or Limit Services to Beneficiaries Solicitation of Comments on the OIG/HCFA Special Advisory Bulletin on the Patient Anti-Dumping Statute

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.

Are OIG advisory opinions binding?

Although OIG Advisory Opinions are not binding on any individual or entity other than the requestor, they provide valuable insights into OIG’s interpretation of the law.

What was the OIG report on the Affordable Care Act?

OIG concluded that the subsidy would present many of the traditional risks of fraud and abuse that the federal Anti-kickback Statute is designed to prevent, including increased costs to federal health care programs, beneficiary steering and anti-competitive effects, and interference with or skewing of clinical decision-making.

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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About this website

What does oig stand for?

DHS Office of Inspector GeneralDHS Office of Inspector General (OIG) is an independent and objective audit, inspection, and investigative body. While part of the Department of Homeland Security, the OIG is also independent of the Department.

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 is Medicare OIG?

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.

Can federal courts issue 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.

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.

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.

How does OIG investigate?

The OIG reviews the information and makes an initial determination of what action is required. If an allegation appears to be credible, the OIG will generally take one of three actions: (1) initiate an investigation; (2) initiate an audit or inspection; or (3) refer the allegation to management or another agency.

What is the general purpose of the OIG Work Plan?

The Work Plan The OIG Work Plan sets forth various projects including OIG audits and evaluations that are underway or planned to be addressed during the fiscal year and beyond by OIG's Office of Audit Services and Office of Evaluation and Inspections.

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 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.

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.

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.

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).

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 20-05?

OIG Advisory Opinion 20-05 represents another shot across the bow from the government to pharmaceutical manufacturers that attempt to subsidize federal health care program beneficiaries’ cost-sharing obligations for the manufacturers’ own drug products. This Advisory Opinion comes on the heels of recent federal enforcement activity surrounding pharmaceutical manufacturers’ involvement in patient assistance programs run by purportedly independent foundations. In those enforcement actions, the U.S. Department of Justice alleged that a number of pharmaceutical manufacturers violated the federal False Claims Act, 31 U.S.C. § 3729 et seq., by unlawfully paying the Medicare copayments for their own products through purportedly independent nonprofit charitable foundations that the manufacturers used as conduits. [1] The Department of Justice’s position on financial assistance provided directly to Medicare beneficiaries by pharmaceutical manufacturers is clear: such conduct not only violates the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b (b), but also undermines the Medicare program’s copayment structure, which Congress intended to serve as a check against the prices manufacturers can charge for their drugs.

When did OIG issue advisory opinion 20-05?

On September 18, 2020, the U.S. Department of Health and Human Services’ Office of Inspector General (“OIG”) issued Advisory Opinion 20-05. In this unfavorable Advisory Opinion, OIG declined to approve a pharmaceutical manufacturer’s proposal to provide cost-sharing assistance directly to Medicare beneficiaries who are prescribed the manufacturer’s drugs.

Is OIG advisory opinion binding?

Although OIG Advisory Opinions are not binding on any individual or entity other than the requestor, they provide valuable insights into OIG’s interpretation of the law. Health care providers that provide financial assistance directly to federal health care program beneficiaries for the providers’ own items or services may wish to re-evaluate the fraud and abuse risks associated with such assistance in light of unfavorable Advisory Opinion 20-05 and the current enforcement environment. Consequently, the principles discussed in this Advisory Opinion may have ramifications well beyond the pharmaceutical industry.

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 ...

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