OIG Revokes Advisory Opinion on Patient-assistance Charity

In what is being called a first-of-its-kind move, the Office of Inspector General for the U.S. Department of Health and Human Services late last month revoked an advisory opinion it issued, and later modified, relating to a patient-assistance charity.

In its opinion, the OIG said it made its determination to revoke its original opinion “based on the requestor’s failure to fully, completely and accurately disclose all relevant and material facts and certifications that were material to OIG’s initial conclusion that the charity’s arrangement would not be in violation of the anti-kickback statute.”

Specifically, the OIG found that the unnamed charity provided patient-specific data to one or more donors that would allow the donors to correlate the amount and frequency of their donations with the number of subsidized prescriptions or orders for their products, and it allowed donors to directly or indirectly influence the identification or delineation of the disease categories.

This is significant because it increased the risk that the charity potentially could have “served as a conduit for financial assistance from a pharmaceutical manufacturer donor to a patient,” and thus increased the risk that the patients who sought assistance from the charity would be steered to federally reimbursable drugs that the manufacturer donor sold, according to the OIG opinion.

Were that to happen, and the patient-assisted charity encouraged the use of drugs that cost more but that are just as effective as lower-priced drugs, it could result in additional costs to Medicare.

The OIG initially issued its opinion in 2006 and later modified it in 2015. It did not specify in its latest advisory opinion how the charity’s failure to comply with its earlier opinions came to its attention other than to say: “we do not undertake an independent investigation of the information or arrangement,” But, the agency added that “given the specific facts and circumstances … OIG believes it is necessary to rescind (the original opinion) to maintain the integrity of the advisory opinion process.”

Advisory opinions are just that, opinions, they hold no force or effect. However, OIG went on to note: “Nothing in this letter limits the investigational or prosecutorial authority of the OIG, the Department of Justice, or any other agency of the government,” perhaps signaling the possibility of a future investigation.

OIG indicated in its opinion that the charity suggested it may cease operations. If it does shutter its operations, OIG noted the charity would have to do so in a way that protects patients and their access to prescription drugs.

This isn’t the first time a patient-assistance charity has been under the microscope. In June, the IRS said it was looking into whether Good Days, which operates a co-pay assistance program, had given a benefit to its pharmaceutical company donors by giving back most of the money they donated as payments for drugs they make.

“In other words, the vast majority of funds that are ‘donated’ by a pharmaceutical manufacturer are returned to it in the form of co-pay assistance,” Cathy Tai, an IRS agent wrote in the court papers.

And, in September, Reuters reported that around a dozen drug makers have disclosed investigations into their support of charities that help patients cover co-payments.

Many drug manufacturers donate to patient assistance programs designed to help financially disadvantaged patients, including federal healthcare program beneficiaries, to obtain drugs needed to treat their diseases. How or if they are compensated in return may force some to change how they operate.

As such, this might be a good time for patient-assistance charities to review the way they do business.

The Health Law Offices of Anthony C. Vitale can review your patient assistant program to confirm compliance with the major fraud and abuse laws which govern this area. Contact us for additional information at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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