On May 18, 2009, the Department of Health and Human Services: Office of Inspector General (“OIG”) posted Advisory Opinion 09-04. This advisory opinion reviewed an arrangement whereby a non-profit, tax-exempt charitable organization (“Requestor”) would provide financial assistance with cost-sharing obligations associated with certain diagnostic testing owed by financially needy patients (“Arrangement”). Because waiving cost-sharing may influence which provider, supplier, service, or product a patient chooses, OIG reviewed the Arrangement to determine whether it violated the Anti-Kickback Statute.
The Requestor provides certain therapy management services to financially needy patients around the country, including Medicare beneficiaries enrolled in Medicare Part D. Those patients are undergoing medical treatment for chronic diseases and are often enrolled in costly specialty therapeutic programs. The Requestor also operates the Arrangement, which offers a financial assistance program for financially needy patients who are HIV-positive or have colorectal cancer. Funding for the Arrangement is provided by individual donors, corporations and foundations, which include manufacturers of drug products, pharmacies that dispense drugs and suppliers of services used by the patients (“Donors”). While Donors can exert earmark donations for either the HIV or colorectal fund, Donors cannot direct donations to specific patients or exert any direct or indirect influence or control over the use of the funds. Further, the Requestor certified that no Donor has direct or indirect influence over the Request’s selection of the diagnostic services (or service provider) covered by the funds, nor do Donors have access to individual patient information. The Requestor utilizes well-defined, objective criteria to determine whether a patient qualifies for cost-sharing under the Arrangement. Finally, the Requestor’s staff does not refer patients to any particular provider, supplier, service or product.
OIG began its analysis by stating that it has long supported and encouraged bona fide charitable assistance programs. OIG analyzed the Arrangement in two parts.
Donors’ Contributions to the Requestor
OIG determined that the bona fide charitable organization (i.e. the Requestor) interposed between the Donors and patients makes it unlikely that Donor contributions will influence any patient’s selection of a particular provider, supplier, service, or product. OIG reached this conclusion noting that (1) no Donor exerts control over the Requestor or the funds; (2) the Requestor operates independently and has autonomous discretion over the use of the funds; (3) the Requestor distributes the funds without regard to any Donor’s interests or applicant’s choice of provider, supplier, service, or product; (4) the Requestor uses independent, objective criteria to distribute the funds; and (5) Donors do not receive any individual patient information.
Requestor’s Grants to Patients
OIG also determined that the grants received by the patients were not likely to influence the patient’s selection of a particular provider, supplier, service or product. OIG stated that (1) all eligible patients are assisted on a first-come, first-serve basis; (2) eligibility is based solely on financial need, without considering the identity of any provider, supplier, service or product; (3) patients enter the Arrangement with a physician order for a diagnostic test and may change physicians or select a different testing supplier at any time without losing their grant; and (4) the Requestor, as a charitable, tax-exempt entity, must monitor utilization and cost so as to minimize expenditures.
While the Arrangement could potentially violate the Anti-Kickback Statute because waiving cost-sharing may influence which provider, supplier, service, or product a patient chooses, the OIG decided, based on the facts and circumstances related to OIG by the Requestor, that it would not subject the Arrangement to sanctions. Please note that the OIG has limited this Advisory Opinion to the particular facts and circumstances of the Arrangement and, therefore, this Advisory Opinion does not have the force of law.