Five Recent OIG and HHS Advisory Opinions

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The Office of Inspector General (“OIG”) issued four advisory opinions at the end of 2020 addressing gift cards and paying for expenses, among other issues. With regard to all of these requests, the OIG analyzed whether the proposed arrangements in these requests would constitute grounds for the imposition of sanctions under the Social Security Act (the “Act”) and the federal anti‑kickback statute (the “Anti-Kickback Statute”).

In addition, the Department of Health and Human Services (“HHS”) Office of the General Counsel (“OGC”) released an advisory opinion clarifying who is covered under the 340B program.

Medicare Enrollment Application Assistant Services for Nursing Homes and Home Health Agencies

On December 23, 2020, the OIG issued Advisory Opinion 20-06 regarding a management company’s provision of below fair market value Medicaid enrollment application assistance services to certain individuals and affiliated skilled nursing facilities’ payments for those services in particular circumstances (the “Proposed Arrangement”).  Under the Proposed Arrangement, a management company provides financial, marketing, and other administrative services to skilled nursing facilities (“SNFs”) and home health agencies (“HHAs”). The SNFs and HHA would refer current patients to the Management Company for its provision of Medicaid enrollment application assistance services. 

The OIG found that the Proposed Arrangement would not violate the Act because it falls within the Promotes Access to Care Exception. In terms of the federal Anti-Kickback Statute, the OIG found that the Arrangement would present no more than a minimal risk of fraud and abuse and, therefore, it would not be subject to sanctions.

Web-Based Platforms Where Providers Can Offer Remittances to Patients Who Select Them

On December 28, 2020, the OIG posted Advisory Opinion No. 20‑07 regarding a web‑based platform’s (the “Requestor”) plan to establish a user platform exclusively for patients who have Medicare as a secondary payor through which: (i) Providers could offer potential remittances to such patients and their third‑party payors for diagnostic, procedural, and surgical care that is both elective and episodic and potentially payable by Medicare as a secondary payor; and (ii) patients could enter into agreements with Providers, where the patients and their third‑party payors could receive a portion of the remittances from Providers, after the Requestor deducts the portion of the remittances it would keep as a fee (the “Proposed Arrangement”). 

The OIG found that the Proposed Arrangement could potentially generate prohibited remuneration under the federal Anti‑Kickback Statute and that no safe harbor existed to protect the Arrangement. Nevertheless, the OIG found that the Proposed Arrangement presented a very low risk of fraud and, therefore, it would not constitute grounds for the imposition of sanctions under the Act or the federal Anti-Kickback Statute.

Gift Cards for Rescheduling Preventive and Early Intervention Care

On December 30, 2020, the OIG posted Advisory Opinion No. 20-08 regarding a federally qualified health center’s (the “Requestor”) proposal to offer gift cards to incentivize certain pediatric patients to attend rescheduled preventative and early intervention care appointments (the “Proposed Arrangement”). Under the Proposed Arrangement, the Requestor would contact the eligible patients (or their parents or guardians, as applicable) and notify them of the opportunity to receive a $20 gift card from Requestor upon rescheduling and attending appointments, which would be furnished at checkout after the appointment and a Requestor staff member has verified the patient’s eligibility. 

The OIG concluded that although there was no safe harbor to protect the Proposed Arrangement, the OIG found very little risk of fraud and, therefore, the OIG would not sanction the Arrangement.

Offering Free Travel and Lodging Expenses to Patients

On December 31, 2020, the OIG posted Advisory Opinion No. 20‑09 regarding a program where a pharmaceutical manufacturer (the “Requestor”) provides financial assistance for travel, lodging, and other expenses to certain patients prescribed the manufacturer’s drug (the “Proposed Arrangement”). The Requestor certified that the financial assistance under the Proposed Arrangement is to ensure patient safety and promote quality‑of‑care, particularly for indigent and rural patients.  

The OIG concluded that although no safe harbor existed under the federal Anti-Kickback Statute, there was little concern for fraud and abuse. In addition, the OIG found that the Proposed Arrangement satisfied the Promotes Access to Care Exception under the Act.

HHS Concludes That Discounts Under 340B Drug Pricing Program Apply to Contract Pharmacies

On December 30, 2020, the HHS OGC released Advisory Opinion 20­‑06 concluding that drug manufacturers, in exchange for coverage of drugs under Medicaid, are required to deliver discounts under the 340B Drug Pricing Program on covered outpatient drugs when contract pharmacies are acting as agents of 340B covered entities. “Covered entities” include safety net hospitals, community health centers, and other institutions serving vulnerable populations, and discounts can range between 25 and 50 percent. Many covered entities enter into written agreements with pharmacies (“contract pharmacies”) to distribute their covered outpatient drugs to the entities’ patients. The OGC clarified that to the extent contract pharmacies are acting as agents for a covered entity, a drug manufacturer in the 340B Program is obligated to deliver its covered outpatient drugs to those contract pharmacies and to charge the covered entity no more than the 340B ceiling price for those drugs.