On Jan. 15, the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) issued Advisory Opinion No. 20-02 approving an arrangement under which a pharmaceutical manufacturer (requestor) could provide financial assistance for travel, lodging and other expenses to certain patients receiving the manufacturer's cell therapy drug (the arrangement). The OIG analyzed whether the arrangement implicates the federal anti-kickback statute (AKS), as well as whether it is likely to influence a beneficiary's selection of a particular provider, practitioner or supplier for the order or receipt of any item or service reimbursed by Medicare or a state health care program under the beneficiary inducements civil monetary penalties (CMP) provision.

The OIG, limiting the application of its opinion to the requestor and to the specific facts of the arrangement, concluded that even though the arrangement would implicate the beneficiary inducements CMP, the arrangement would fall within the "promotes access to care" exception; and even though the arrangement could potentially generate prohibited remuneration under the AKS if the intent was to induce or reward referral of federal health care program business, the OIG would not impose administrative sanctions in connection with this arrangement.

The Arrangement

The requestor manufactures a drug approved by the Food and Drug Administration (FDA) for two indications: Disease A (generally affecting children and young adults) and Disease B (generally affecting adults). The drug is a personalized medicine made from the patient's own cells and is a one-time, potentially curative treatment that carries a black box warning—the strongest warning required by the FDA. Because the drug has potentially life-threatening or fatal reactions, including certain neurological toxicities, its FDA prescribing protocol requires administering physicians to monitor patients for symptoms two or three times during the first week following drug infusion and to instruct patients to remain within close proximity of the administering facility for at least four weeks after infusion. According to the requestor, patient proximity to the center is important for patient safety because improper treatment of a potential reaction could negatively impact the drug's effectiveness or harm the patient.

The FDA also requires the requestor to implement a risk evaluation and mitigation strategy (REMS) to further mitigate the risks and neurological toxicities associated with the use of the drug. Only REMS-certified physicians may prescribe the drug, and, consistent with the REMS, the drug may be administered only in certain facilities or "infusion centers" chosen unilaterally by the requestor based on specific criteria. The infusion centers and physicians are not required to prescribe the drug manufacturer's drug and any physician or center that meets the criteria may become involved in the arrangement.

Because of the severe consequences of being far away from a center, including possible death, the drug manufacturer proposed providing patients and caregiver(s) with one round-trip to the center, lodging, meals and certain out-of-pocket expenses for the period of monitoring after the infusion. Specifically, the requestor proposed the following:

• Reimbursement for gas and tolls or arrangements for transportation via bus, rail, rental car or air travel for a patient and caregiver to and from the closest center.
• Reimbursement for modest lodging near the center during drug treatment and post-treatment monitoring if the patient is not eligible to receive lodging from the center.
• Reimbursement of up to $50 per person per day for out-of-pocket expenses such as meals and parking costs.

To be eligible for financial assistance under the arrangement, patients must have been prescribed the drug for the indication approved by the FDA, have a household income that does not exceed 600% of the federal poverty level, live more than two hours or 100 miles from the nearest center, and have no insurance for nonemergency medical travel.

The requestor certified that it has a written policy detailing the eligibility criteria, applies the policy uniformly and consistently, and maintains individualized documentation reflecting each patient's eligibility and any reimbursement provided. The arrangement requires patients and caregivers to agree not to seek reimbursement from federal health care programs for costs covered by the arrangement.

OIG Analysis

• Anti-Kickback Statute

The OIG found that the arrangement did implicate the AKS—which makes it a criminal offense to knowingly and willfully offer or receive remuneration to induce or reward the referral of items or services reimbursable by a federal health care program—in that the assistance provided to patients could influence them to purchase the drug and utilize a center that they may not have otherwise chosen for treatment, and the assistance was a form of remuneration to the centers.

However, the OIG elected not to impose sanctions on the requestor because: its focus is on aiding financially needy or indigent patients and increasing access to care; the arrangement allows physicians to meet the FDA's safety requirements connected to this drug; 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; the drug is a one-time, potentially curative treatment, and the rRequestor does not advertise the arrangement; 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 the OIG is unaware of any existing authority that would allow the secretary to pay for these nonmedical services.

• Beneficiary Inducements CMP

The OIG also assessed the arrangement under the beneficiary inducements CMP, which prohibits a person or entity from offering or providing any remuneration to a Medicare or Medicaid beneficiary that the offerer knows or should know is likely to influence the beneficiary's selection of a particular provider, practitioner or supplier.

The OIG found that even though the requestor (as a pharmaceutical manufacturer) is not a "provider, practitioner or supplier" for purposes of the beneficiary inducements CMP, its offer of financial assistance under the arrangement constitutes remuneration that could reasonably influence a patient to select a REMS-certified physician or center in the requestor's network that the patient may not otherwise have selected to receive federally reimbursable items and services. Accordingly, the OIG determined that the arrangement implicates the beneficiary inducements CMP.

However, the OIG concluded that the arrangement satisfies the promotes access to care exception to the beneficiary inducements CMP. The OIG first examined whether the remuneration offered under the arrangement improves a beneficiary's ability to obtain items and services payable by Medicare or Medicaid, and as it had determined that the secretary has no authority to cover nonmedical expenses and the requestor does not offer the arrangement if a center will provide lodging, this was found to be the case. Next, the OIG determined that the arrangement posed a low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs. The "promotes access to care" exception to the beneficiary inducements CMP states that remuneration poses a low risk of harm if it is: unlikely to interfere with, or skew, clinical decision-making; unlikely to increase costs to federal health care programs or beneficiaries through overutilization or inappropriate utilization; and does not raise patient safety or quality-of-care concerns. As the arrangement is designed to increase patient safety, the OIG found that it was permissible and satisfies the low-risk-of-harm provision of the "promotes access to care" exception to the beneficiary inducements CMP.

Takeaways

OIG's analysis and subsequent determination was fact-sensitive, and OIG emphasized that the advisory opinion could not be relied upon by any persons other than the original requestor of the opinion. Nevertheless, the opinion confirms that financial assistance provided by pharmaceutical manufacturers to certain patients may be lawful under certain scenarios.

—Rachel E. Lusk, an associate at Lamb McErlane who focuses on health law and health care litigation, assisted in the preparing this article.

Vasilios J. Kalogredis is chairman of Lamb McErlane's health law department. He represents many medical and dental groups and thousands of individual physicians and dentists.