HHS OIG Issues Advisory Opinion on Provider-Paid Travel for Rare Disease Patients

On January 21, 2020, the United States Department of Health and Human Services Office of Inspector General (HHS OIG) posted OIG Advisory Opinion No. 20-02, regarding financial assistance for travel, lodging, and other expenses provided by a pharmaceutical manufacturer (“Requestor”) to certain patients prescribed the manufacturer’s drug.

The Advisory Opinion is in response to a question about whether a specific arrangement – a pharmaceutical manufacturer providing financial assistance for travel, lodging, and other expenses to certain patients – specifically, whether the arrangement constitutes grounds for sanctions under the Social Security Act or the Federal anti-kickback statute.

Based on the particular fact pattern in the OIG letter, while the arrangement could lead to prohibited remuneration under the anti-kickback statute if the intent to induce or reward referrals of Federal health care program business were present, OIG will not impose administrative sanctions on the requesting company in connection with the arrangement. However, OIG cautioned that this advisory opinion is limited to this specific arrangement and that the only ones that should rely on it are the requestors of the opinion.

In this case, it is very important to note the very specific factors cited in the opinion. For example, the Requestor manufactures a drug approved by the Food and Drug Administration (FDA) for two indications: a refractory or recurrent [disease redacted] (“Disease A”), which generally affects children and young adults; and a relapsed or refractory [disease redacted] (“Disease B”), generally affecting adults. The drug is a personalized medicine made from the patient’s own cells and is a one-time treatment with the potential to cure the patient. The drug in question carries a black box warning of certain life-threatening or fatal reactions including [syndrome redacted] (the “Syndrome”) and certain neurological toxicities. The prescribing information as approved by the FDA requires physicians to monitor patients for signs or symptoms of the Syndrome 2-3 times in the first week following the infusion and after that, patients must remain in close proximity to the facility for at least four weeks following the infusion. Only certain physicians, who accept the responsibility for implementing necessary safety protocols, may prescribe and administer the drug.

Consistent with the REMS, Requestor has entered into arrangements with certain inpatient and outpatient facilities (“Centers”) to safely infuse its Drug. In addition to infusing the Drug, the Centers perform leukapheresis services and collect, process, package, and ship the patient’s white blood cells to Requestor so that Requestor may use the patient’s cells to individually manufacture the Drug. Requestor certified that it does not require either physicians or Centers to prescribe its Drug exclusively and that any facility that meets all REMS with ETASU requirements and Requestor’s criteria, which it uniformly applies, may become a Center.

Under the “approved” arrangement, patients of the drug, including Federal health care program beneficiaries, are potentially eligible for financial benefits. Under the Arrangement, the pharmaceutical company assists eligible Disease A patients, Disease B patients 18-25 years of age, 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 Disease B patients 26 and older, the company provides the same support for a patient and one caregiver. The company 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 company does not authorize lodging under the arrangement if the Center administering the drug has lodging that the patient is eligible to use.

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 pharmaceutical company also certified that it does not bill or otherwise shift the costs of the arrangement to the Federal health care programs.

Interestingly, the pharmaceutical company does not advertise the arrangement and patients do not learn about – or become eligible for – the arrangement until they have been diagnosed with Disease A or Disease B and are prescribed treatment with the drug.

Eligible patients are those who have been prescribed the drug for an FDA-approved indication and have a household income at or below 600 percent of the Federal Poverty Level, who live more than 2 hours driving distance or 100 miles from the nearest Center accepting patients, and who do not have insurance for non-emergency medical travel. The arrangement is offered to patients irrespective of their provider or insurance status and enrolled patients can change providers.

What Does this Mean?

In short, providers cannot take this as a blanket approval to run afoul of the Anti-Kickback Statute and approve broad payments of patient travel, meal, and lodging expenses. Instead, providers need to focus on: unique healthcare, medically relevant factors for required patient care; extremely indigent patients who meet high threshold of poverty; limitations on costs affecting Medicare/Medicaid and other federal healthcare costs.