oig guidance patient assistance programs 2005

What is OIG guidance?

Why is it important for PAPs to provide free drugs outside of Part D?

How to reduce fraud and abuse exposure?

What is cost sharing in PAP?

What are the issues with PAPs?

Do PAPs have to disenroll Medicare?

Can a pharmacy waive cost sharing?

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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.

Special Advisory Bulletins | Office of Inspector General | Government ...

Special Advisory Bulletins. 09-16-2014. Special Advisory Bulletin: Pharmaceutical Manufacturer Copayment Coupons; 05-21-2014. Supplemental Special Advisory Bulletin: Independent Charity Patient Assistance Programs

New OIG Rules Change Patient Incentive Program Landscape: Where Are the ...

With health care becoming more consumer-driven, many health care providers and health plans are wrestling with how to incentivize patients to participate in, and adhere to, health promotion programs and treatment plans.

Supplemental Special Advisory Bulletin: Independent Charity Patient ...

This Supplemental Bulletin updates the OIG Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees that published in the Federal Register on November 22, 2005 (70 FR 70623).

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.

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.

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.

When was the OIG Special Advisory Bulletin published?

This Supplemental Bulletin updates the OIG Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees that published in the Federal Register on November 22, 2005 ( 70 FR 70623 ).

What is PAP in Medicare?

Patients who cannot afford their cost-sharing obligations for prescription drugs may be able to obtain financial assistance through a patient assistance program (PAP). PAPs have long provided important safety net assistance to such patients, many of whom have chronic illnesses and high drug costs. Many PAPs also present a risk of fraud, waste, and abuse with respect to Medicare and other Federal health care programs. We issued a Special Advisory Bulletin regarding PAPs in 2005 [ 1] (the 2005 SAB) in anticipation of questions likely to arise in connection with the Medicare Part D benefit. In the 2005 SAB, we addressed different types of PAPs and stated that we believed lawful avenues exist for pharmaceutical manufacturers and others to help ensure that all Part D beneficiaries can afford medically necessary drugs. [ 2] We also noted in the 2005 SAB that we could only speculate on fraud and abuse risk areas, because the Part D benefit had not yet begun. This Supplemental Special Advisory Bulletin (Supplemental Bulletin) is based on experience we have gained in the intervening years; it is not intended to replace the 2005 SAB, nor does it replace other relevant guidance, such as the 2002 OIG Special Advisory Bulletin on Offering Gifts and Other Inducements to Beneficiaries. [ 3]

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.

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).

II. The Federal Anti-Kickback Statute

• The Federal anti-kickback statute, section 1128B(b) of the Social Security Act (the Act),[5] makes it a criminal offense knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward the referral or generation of business reimbursable by any Federal health care …

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III. Patient Assistance Programs

IV. Bulk Replacement Models