The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued Advisory Opinion No. 24-02, addressing a patient assistance arrangement by a nonprofit organization. This opinion offers crucial insights into the compliance landscape for patient assistance programs (PAPs) concerning the Federal anti-kickback statute and the Beneficiary Inducements Civil Monetary Penalty (CMP).
Factual Background and Inquiry
The requesting nonprofit provides financial support to patients with twelve specific medical conditions who have demonstrated financial need through various disease-focused funds. Each of the funds is designed around a clinically recognized “rare disorder” and is not narrowed to cover only specific treatments, drugs, symptoms, stages of a particular disease, or degrees of disease severity. These funds support out-of-pocket costs associated with treatment, medications, and related medical expenses. Further, each of the funds has a single donor and each donor is a pharmaceutical manufacturer that manufactures or markets a drug to treat the disease state addressed by the fund.
Of note, a patient’s eligibility for financial support is not contingent on the use of a particular treating physician or pharmacy, or whether the patient has been prescribed any particular drug or treatment approach. As part of the application process, Requestor does not solicit information concerning what, if any, drugs a patient is taking or has been prescribed and while Requestor considers out-of-pocket costs for medications as part of its financial eligibility process, it does not ask applicants which drugs they are taking. Therefore, Requestor generally decides whether to accept patients into its Disease Funds without knowing what drugs the patient may be taking or may have been prescribed.
Under the Arrangement, the Disease Funds provide various categories of support to patients, including: cost-sharing subsidies for prescription drugs and other items or services; financial support to cover, in whole or in part, medical expenses not covered by insurance; subsidies for insurance premiums; and other emergency relief.
Additionally, the Requestor enters into written agreements with each donor. The written agreements state that the donor will not exert, directly or through any affiliate, any influence or control over the identification, delineation, establishment, or modification of any specific disease funds operated by Requestor. In addition, Requestor does not establish, delineate, or modify disease funds at the request or suggestion of donors or potential donors (or their affiliates).
The inquiry focused on whether this arrangement could result in sanctions under various health care statutes, including the federal Anti-Kickback Statute and Beneficiary Inducements CMP.
OIG’s Analysis and Conclusion
The OIG concluded that the arrangement, while potentially generating prohibited remuneration under the anti-kickback statute if the requisite intent were present, does not warrant administrative sanctions. The OIG’s decision rests on several protective measures implemented by the nonprofit, such as the disease fund’s independence from donor influence and its broad eligibility criteria, which do not restrict aid based on the treatment provider or prescriptions used.
Significantly, the OIG highlighted that the arrangement does not result in beneficiary inducements that could improperly influence patients’ choice of providers or treatments, thus not implicating the Beneficiary Inducements CMP. This is pivotal for healthcare entities navigating the complexities of patient aid programs, emphasizing the importance of maintaining a clear separation between donor contributions and the direct support offered to patients.
In the Opinion, HHS OIG notes that the advisory opinion is only in force and effect from the date of the opinion until January 1, 2027, as Congress enacted legislation that restructures the cost sharing imposed on Medicare Part D enrollees, resulting in an elimination of the 5% cost sharing in the catastrophic phase beginning in 2024 and capping enrollees’ annual out-of-pocket costs for Part D drugs to $2,000 starting in 2025. Requestor may submit a new advisory opinion request if it wishes to extend the time period.
OIG also noted that the arrangement does not implicate the Beneficiary Inducements CMP as the arrangement does not influence an enrollee’s selection of a particular provider, practitioner, or supplier for the order or receipt of any item or service for which payment may be made, in whole or in part, by Medicare or a State health care program.
Guidance for Compliance: Lessons from Advisory Opinion 24-02
While the advisory opinion is only in response to the specific facts set forth and only applicable to the Requestor, entities that operate similar patient assistance programs may be able to draw several critical lessons from this opinion:
- Independence: Programs must ensure that funding from donors, particularly pharmaceutical manufacturers, does not exert control over the operations or funding allocation, helping to maintain program integrity.
- Transparent Eligibility Criteria: Establishing clear, broad-based eligibility criteria that do not tie financial aid to specific providers, treatments, or medications is crucial.
- Document and Monitor Legislative Impacts: Organizations must stay informed about legislative changes that could affect program operations and necessitate adjustments in compliance strategies.
Broader Implications for Healthcare Compliance
Advisory Opinion 24-02 serves as a significant milestone for healthcare compliance, particularly in the context of non-profit patient assistance programs and their interaction with federal healthcare regulations. It highlights the OIG’s recognition of the need for patient support programs and the simultaneous necessity for rigorous compliance frameworks to prevent abuse and ensure that aid reaches those in genuine need without improper inducements.