oig special advisory bulletin patient assistance programs

On May 21, 2014, the Office of the Inspector General (“OIG”) of the Department of Health and Human Services issued a Supplemental Special Advisory Bulletin (“Supplemental Bulletin”) addressing the risks that Independent Charity Patient Assistance Programs (“PAPs”) raise under the Anti-Kickback Statute and beneficiary inducement civil monetary penalties of the Social Security Act.

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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.

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.

What is the special advisory bulletin for Medicare Part D?

Special Advisory Bulletin: Patient Assistance Programs for Medicare Part D Enrollees (11-07-2005) Updated Special Advisory Bulletin on the Effect of Exclusions From Participation in Federal Health Programs Special Advisory Bulletin: Average Manufacturer Price and Average Sales Price Reporting Requirements

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 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.

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 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).

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.

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 ...

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 the OIG in PAP?

The OIG stated that actions by donors to correlate funding provided to a PAP and support for the donor's own products may be "indicative of a donor's intent to channel its financial support to copayments of its own products" in violation of the federal Anti-Kickback Statute.

What is the OIG?

The OIG issues Advisory Opinions regarding the application of the OIG's fraud and abuse authorities to requesting parties related to existing or proposed business arrangements , including the application of the federal Anti-Kickback Statute and Civil Monetary Penalties Law.

Is the cost of a drug for which the patient is applying for assistance an appropriate stand-alone factor in?

The OIG emphasized in the Supplemental Bulletin that the cost of a particular drug for which the patient is applying for assistance is not an appropriate stand-alone factor in determining individual financial need, but may be one of many obligations that affects the patient's financial circumstances. A key consideration is whether the independent charity PAP determines eligibility according to a reasonable, verifiable, and uniform measure of financial need that is applied in a consistent manner.

Disease Funds

As indicated in the 2005 Bulletin, the OIG recognizes that some bona fide independent charities may focus on particular disease states and that donors may earmark their contributions for support of patients suffering from these particular diseases.

Eligible Recipients

Next, the OIG addresses the concept of how recipients are deemed eligible by the PAP.

Conduct of Donors

Although the majority of the Supplemental Bulletin focuses on the conduct of Independent Charity PAPs, the OIG seems to suggest that donors are not immune from liability under the law. Specifically, the OIG addresses how Advisory Opinions focus on the actions of the charities that requested the opinions—not the donors.

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

II. The Federal Anti-Kickback Statute

III. Patient Assistance Programs

• As described more fully below, cost-sharing subsidies provided by pharmaceutical manufacturer PAPs pose a heightened risk of fraud and abuse under the Federal anti-kickback statute. However, there are non-abusive alternatives available. In particular, as discussed below, pharmaceutical manufacturers can donate to bona fideindependent charity PAPs, ...

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IV. Bulk Replacement Models