HHS's Office of Inspector General (OIG) provides formal guidance regarding patient assistance programs to ensure they don't violate the federal Anti-Kickback Statute, which prohibits giving monetary incentives to induce purchases of specific products by a federal healthcare program like Medicare.
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Why is patient assistance important?
What are the findings of Kang et al 1 and the Department of Justice settlements?
Is patient assistance tax deductible?
Is patient assistance violating federal law?
Is JAMA Network Open accepting submissions?
Can pharmaceutical companies pay for a referral?
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Patient Assistance Programs and Anti-Kickback Laws
By Katherine Kraschel, JD (Student Fellow Alumna) and Gregory Curfman, MD JAMA August 6, 2019. From the article: Patient assistance programs provide financial support to patients who cannot afford their prescription drugs.
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 ...
Patient Assistance Programs & Prescription Assistance Programs
Discussion. There are several types of PAPs. There are ones that are designed for patients that do not have insurance, others for individuals whose insurance co-payment amounts are prohibitively expensive, and still other programs to assist with specific types of insurance, such as Medicare Part D.
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.
Why is patient assistance important?
As others have noted, patient assistance programs may provide a critical safeguard for patients against the financial burden that may accompany treatment with high-cost drugs. 2 However, there is concern that patient assistance programs may actually act as intermediaries to facilitate financial incentives from pharmaceutical companies to patients in exchange for patients using their own (expensive) drugs. 3 In fact, funds from the pharmaceutical industry provided to Medicare beneficiaries to assist those patients in acquiring Medicare Part D drugs are exactly what the federal Anti-Kickback Statute is designed to prohibit.
What are the findings of Kang et al 1 and the Department of Justice settlements?
The findings of Kang et al 1 and the Department of Justice settlements highlight the need to address the legality of some current patient assistance program practices. By preferentially covering co-payments for high-cost drugs (in lieu of coverage for generic equivalents), the cost-containment purpose of Medicare cost-sharing obligations is hindered. Although patient assistance programs may provide important financial relief for patients, the current patient assistance program structure largely neglects uninsured individuals.
Is patient assistance tax deductible?
The extent to which patient assistance programs violate tax exemption standards that prohibit private benefit that does not further its charitable purpose and is intentionally aimed to benefit the pharmaceutical companies warrants further scrutiny. It is particularly egregious that the payments made from pharmaceutical companies to patient assistance programs may be illegal yet simultaneously tax deductible. In 2017, the Internal Revenue Service initiated inquiries into the compliance of one patient assistance program. 10 However, enforcement activity has focused on anti-kickback violations by the pharmaceutical companies.
Is patient assistance violating federal law?
Coupled with recent enforcement activity by the Department of Justice, the data reported by Kang et al 1 suggest that some patient assistance programs may be violating federal law and warrant continued regulatory scrutiny and enforcement. As was stated in one Department of Justice settlement, “This misconduct is widespread, and enforcement will continue until pharmaceutical companies stop circumventing the anti-kickback laws to artificially bolster high drug prices, all at the expense of American taxpayers.” 4
Is JAMA Network Open accepting submissions?
New! JAMA Network Open is now accepting submissions. Learn more.
Can pharmaceutical companies pay for a referral?
The apparent noncompliance raises the question if it is time to revisit the requirements of the Office of Inspector General for patient assistance programs to operate within the confines of Anti-Kickback Statute prohibitions, and whether any contributions from pharmaceutical companies to specific patient assistance programs should be permitted. The Anti-Kickback Statute prohibits pharmaceutical companies from paying any remuneration in exchange for a referral for an item or service that may be paid for by a federal health care program, including Medicare or Medicaid. 5 For this reason, pharmaceutical companies cannot directly cover cost-sharing obligations for patients with Medicare or Medicaid. Covering the cost would constitute “remuneration” in exchange for the Medicare beneficiaries to purchase their drugs, for which Medicare would then make a payment to the pharmaceutical company.
What is the anti kickback statute?
The OIG found that the arrangement implicates the anti-kickback statute because it involved remuneration to beneficiaries, the centers providing treatment and the physicians prescribing the drug. However, the OIG elected not to impose sanctions on the requestor because 1) its focus is on aiding financially needy or indigent patients and increasing access to care; 2) the arrangement allows physicians to meet the FDA’s safety requirements connected to this drug; 3) Under the REMS, the number of physicians who can prescribe and administer the drug is limited and the requestor certified that it does not require physicians nor centers to prescribe its drug exclusively and that any facility who meets the safety requirements may administer the drug; 4) the drug is a one-time, potentially curative treatment, and the requestor does not advertise the arrangement; 5) only patients who live greater than two-hours driving distance away from a center and who are ineligible to receive lodging from a center may take part in the arrangement; and 6) the OIG is unaware of any existing authority that would allow the secretary to pay for these non-medical services.
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.
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.
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.
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.
Which act requires disclosure of medical manufacturers' payments to doctors and teaching hospitals?
The authors recommended that the Affordable Care Act's Sunshine Act provisions, which require public disclosure of medical manufacturers' payments to doctors and teaching hospitals, be amended to include drug company payments to patient-advocacy organizations.
Who is Andre Rucker?
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What is the 2014 advisory bulletin?
A May 2014 special advisory bulletin cautioned that industry-funded assistance programs, if not properly structured, have the potential for abuse. That bulletin warned that patient-assistance programs that help only patients with certain symptoms, severity of symptoms or methods of administration of medications might be at risk ...
Do drug companies offer assistance to Medicare?
Many drugmakers run their own assistance programs for patients. But they typically offer assistance only to privately insured and uninsured patients, not to Medicare or Medicaid patients because of the federal anti-kickback statute, said Tom Bulleit, a partner at Ropes & Gray in Washington who represents drug companies.
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 is the focus of PAPs?
Ultimately, data sharing and communication between charity PAPs and donors appears to be the key area of focus for OIG, DOJ, and IRS enforcement. If such communication and data sharing is prohibited, whether by state statute or federal regulatory enforcement, it is remains to be seen whether PAPs will continue to operate as they are currently structured. In any event, it is incumbent upon interested parties to stay abreast of changes in the law and developing enforcement trends, and to continually monitor and update their compliance programs accordingly. For example, given the amount of scrutiny applied to coordination between the business and charitable giving arms of medical product manufacturers, compliance programs should be actively examining all intra-firm transactions to assure that no improper influence is being exerted over communications with and donations to charity PAPs.
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 the complaint against PSI?
district court for the Eastern District of Virginia, alleging that the OIG’s recent guidance prohibits PSI’s protected free speech with donors and potential donors, jeopardizing PSI’s ability to operate. [29] .
Does CVC provide financial assistance?
In a letter dated January 4, 2018, the President and CEO of CVC announced that the charity would not offer financial assistance for any disease fund in 2018. [15] The decision left many patients who had previously received financial assistance from the charity suddenly without the ability to pay for necessary drugs in 2018, and caused concern in patients and even the government. On the same day as CVC’s announcement that it would not provide financial assistance in 2018, the OIG sent a letter to The Pharmaceutical Research and Manufacturers of America (“PhRMA”) about the “emergent issue” related to CVC, specifically that some patients would “face significant financial barriers to obtaining critical drugs” (“PhRMA Letter”). The PhRMA Letter stated that the OIG will not pursue administrative sanctions against any company that manufactures, sells, or distributes outpatient prescription drugs and provides free drugs during 2018 to federal health care program beneficiaries who were receiving assistance from CVC as of November 28, 2017, so long as certain outlined criteria are met. [16]
Does UT require a PAP review?
Unlike the Aegerion CIA, however, the UT CIA does not require the establishment of an independent PAP review program, and rather than requiring written agreements with PAPs to include certain provisions, the CIA requires UT to issue those guidelines as a policy for future interactions with PAPs. Recent IRS Scrutiny.
What is a meaningful review and processing of funding requests?
Meaningful Review and Processing of Funding Requests: All requests should follow the company’s customary and generally applicable grant request processes, and these requirements should be incorporated within the PAP policy/procedure described above. The PAP policy/procedure should specify standardized, objective criteria for assessing requests from independent PAPs for both initial and additional or supplemental funding (e.g., funding beyond that which is set forth in the annual budget). Supplemental requests for funding must be reviewed for compliance with applicable Federal health care program requirements, OIG guidance, and company policies and procedures.
What information should a PAP provider share with patients?
The company should also limit the information it shares about independent PAPs with patients and providers. For example, if the company’s reimbursement hub triages requests for co-pay or other financial assistance, the hub should provide only a general overview of the third-party assistance options to the patient or provider, along with contact information for each independent PAP that has an applicable fund and is currently accepting new applications (i.e., a “cold transfer”). Hub representatives should explicitly inform the patient or the patient’s provider that the referral to the independent PAP is not a guarantee of assistance and that the PAP has full discretion whether to provide assistance based on its own independent eligibility criteria. To this end, company personnel should generally be restricted from (a) filling out applications for patients or seeking information about the status of any individual application for assistance from any PAP, or (b) seeking detailed information regarding why and from which PAP any patients received or were denied assistance. In addition, the company should limit, as much as possible, the information coming from patients who were transferred to PAPs for assistance and who were denied or received assistance; if company personnel receive such information, they should not (1) share it beyond reimbursement support personnel, or (2) record it in the patient’s case notes.
What is the DOJ's interest in PAPs?
DOJ interest in drug company relationships with independent PAPs began in earnest in the midst of larger concerns regarding sharply rising drug prices. While investigating pricing schemes and specialty pharmacy relationships in 2015, DOJ began issuing subpoenas to pharmaceutical companies that manufacture expensive and specialty drugs that requested information on the companies’ relationships with independent PAPs. 9 Since then, the DOJ has broadened its inquiry to numerous pharmaceutical companies and independent PAPs.
Does a Hub representative have to inform the patient or the patient's provider that the referral to the independent PAP?
Hub representatives should explicitly inform the patient or the patient’s provider that the referral to the independent PAP is not a guarantee of assistance and that the PAP has full discretion whether to provide assistance based on its own independent eligibility criteria.
Is it permissible for a charitable organization partly funded by kidney dialysis providers to pay Medicare Part B?
4 See OIG Adv. Op. 97-01 (June 11, 1997) (advising that it is permissible for a charitable organization partly funded by kidney dialysis providers to pay Medicare Part B, Medigap and other health insurance premiums for end-stage renal disease patients who are financially needy).
Is PAP independent?
Independence of PAP with Respect to Patient Eligibility: The company may not ex ert (directly or through any affiliate) any influence or control over the independent PAP’s process or criteria for determining eligibility of patients who qualify for assistance. Part Three: A Developing Risk Area — Free Drug Programs.
Should companies provide donations for disease state funds?
Prohibition on Providing Support for Suspect Funds: The company should not provide donations for a disease state fund that covers only a single product or that covers only company products.
Why is patient assistance important?
As others have noted, patient assistance programs may provide a critical safeguard for patients against the financial burden that may accompany treatment with high-cost drugs. 2 However, there is concern that patient assistance programs may actually act as intermediaries to facilitate financial incentives from pharmaceutical companies to patients in exchange for patients using their own (expensive) drugs. 3 In fact, funds from the pharmaceutical industry provided to Medicare beneficiaries to assist those patients in acquiring Medicare Part D drugs are exactly what the federal Anti-Kickback Statute is designed to prohibit.
What are the findings of Kang et al 1 and the Department of Justice settlements?
The findings of Kang et al 1 and the Department of Justice settlements highlight the need to address the legality of some current patient assistance program practices. By preferentially covering co-payments for high-cost drugs (in lieu of coverage for generic equivalents), the cost-containment purpose of Medicare cost-sharing obligations is hindered. Although patient assistance programs may provide important financial relief for patients, the current patient assistance program structure largely neglects uninsured individuals.
Is patient assistance tax deductible?
The extent to which patient assistance programs violate tax exemption standards that prohibit private benefit that does not further its charitable purpose and is intentionally aimed to benefit the pharmaceutical companies warrants further scrutiny. It is particularly egregious that the payments made from pharmaceutical companies to patient assistance programs may be illegal yet simultaneously tax deductible. In 2017, the Internal Revenue Service initiated inquiries into the compliance of one patient assistance program. 10 However, enforcement activity has focused on anti-kickback violations by the pharmaceutical companies.
Is patient assistance violating federal law?
Coupled with recent enforcement activity by the Department of Justice, the data reported by Kang et al 1 suggest that some patient assistance programs may be violating federal law and warrant continued regulatory scrutiny and enforcement. As was stated in one Department of Justice settlement, “This misconduct is widespread, and enforcement will continue until pharmaceutical companies stop circumventing the anti-kickback laws to artificially bolster high drug prices, all at the expense of American taxpayers.” 4
Is JAMA Network Open accepting submissions?
New! JAMA Network Open is now accepting submissions. Learn more.
Can pharmaceutical companies pay for a referral?
The apparent noncompliance raises the question if it is time to revisit the requirements of the Office of Inspector General for patient assistance programs to operate within the confines of Anti-Kickback Statute prohibitions, and whether any contributions from pharmaceutical companies to specific patient assistance programs should be permitted. The Anti-Kickback Statute prohibits pharmaceutical companies from paying any remuneration in exchange for a referral for an item or service that may be paid for by a federal health care program, including Medicare or Medicaid. 5 For this reason, pharmaceutical companies cannot directly cover cost-sharing obligations for patients with Medicare or Medicaid. Covering the cost would constitute “remuneration” in exchange for the Medicare beneficiaries to purchase their drugs, for which Medicare would then make a payment to the pharmaceutical company.
