Recently, the Department of Health and Human Services Office of Inspector General (“OIG”) issued Advisory Opinion 24-02 (“Opinion”) regarding patient assistance funds provided by nonprofit charitable organizations (“Requesters”). This opinion is the latest in a series of advisory opinions that have approved similar patient assistance programs (“PAPs”). As emphasized in previous advisory opinions, the OIG reiterates the importance of charitable organizations being independent of drug manufacturer influence.
Overview of the patient support fund in question
The applicant, a 501(c)(3) nonprofit organization, provides grants to patients with rare diseases (i.e., those affected by fewer than 200,000 Americans) to assist with out-of-pocket costs associated with treatment. We provide financial support (“Sickness Fund”). Sickness funds provide (i) cost-sharing subsidies for prescription drugs and other goods or services, (ii) financial assistance for medical expenses not covered by insurance, (iii) premium subsidies, and (iv) emergency assistance. provide relief. Each disease fund:
- is specific to a clinically recognized medical condition;
- Not narrowed down to cover only specific treatments, drugs, symptoms, specific disease stages, or disease severity.
- There is only one donor, and each donor is a pharmaceutical company that manufactures or sells drugs to treat the medical conditions covered by the Disease Fund.
Patients receive support based on their financial and medical eligibility, and the Sickness Fund has built-in safeguards, including:
- Financial eligibility is evaluated based on many factors, including income, assets, number of dependents, obligation to pay for expensive prescription drugs, and other costs necessary to treat the patient’s illness.
- Medical eligibility is based on a signed certification of medical necessity by the patient’s physician.
- Patients will be admitted on a first-come, first-served basis as long as they meet financial and medical eligibility criteria and funds are available in the Sickness Fund.
- Neither the Client nor any third party contracted by the Client will ensure that only certain patients, such as those taking donor medications, receive assistance.
- Eligibility is not dependent on the choice of a particular treating physician or pharmacy, the patient’s treatment approach, or whether the patient is prescribed a particular medication.
- The requester does not request information about the medications the patient is taking or prescribed, if any.
- Patients are accepted into the Sickness Fund without the applicant knowing what medications the patient is taking or being prescribed.
Eligible patients can receive assistance for up to 12 months, with the possibility of renewal. All patients are eligible to participate in the Sickness Fund, regardless of whether they are insured by a federal health care program, a private insurance company, or uninsured.
The applicant and the donor will enter into a written agreement specifying that the donor will not influence or control, directly or through any affiliate, the development, establishment, or modification of the Sickness Fund. moreover:
- Applicant shall not establish, define, or modify the Sickness Fund at the request or suggestion of Provider or its affiliates.
- Decisions about which disease funds to create and which categories of support to provide to patients are made without the influence of existing or potential donors.
- Patients and healthcare providers are not informed of the identity of the donors supporting the patient’s disease fund.
- Donors cannot designate that disease funds be used solely for prescription drug cost-sharing grants.
- Donors cannot influence what types of medicines, other goods, or services their donations are used for.
Donors only receive limited information and do not receive the following types of information:
- Individual information on sick fund beneficiaries;
- information about how funds from the disease fund are used (such as how much is spent on specific drugs);
- Information that allows donors to correlate the amount and frequency of donations with the number of Sickness Fund patients who use their products or services or the amount of products supported by Sickness Funds.
Applicable law and guidance background
The federal Anti-Kickback Statute (“AKS”) makes it a crime to knowingly and knowingly offer, pay, solicit, or receive remuneration to induce the purchase or arrangement of goods or services for which rebate is available under federal law. is. healthcare program.[i] “Compensation” includes any transfer of value, direct or indirect, overt or secret, in cash or in kind. The evaluated arrangements are because pharmaceutical companies, through their applicants, offer various categories of compensation to patients (including beneficiaries of federal health care programs) who are diagnosed with diseases that can be treated with drugs manufactured by the provider. Involved in AKS.
The Civil Penalties Act’s Beneficiary Solicitation Prohibition Act (“Beneficial Solicitation CMP”) imposes a reward against a beneficiary of a federal or state health care program that he or she knows or should know is likely to become a beneficiary. imposes civil monetary penalties on those who provide or transfer. influence a beneficiary’s selection of a particular provider, practitioner, or supplier;[ii] This arrangement does not relate to beneficiary induction CMPs because a patient’s eligibility is not dependent on the choice of a particular physician or pharmacy, and therefore this arrangement does not affect the enrollee’s choice of a particular health care provider. .
Analysis under federal anti-kickback statutes
OIG first discussed previous guidance regarding patient PAPs that are “independent” charities, noting the importance of these PAPs’ assistance to patients with financial need and their risk of fraud and abuse. The risks of such fraud and abuse include (i) the potential for unreasonable drug price increases and increased costs to federal health care programs; and (ii) the risk that Medicare Part D enrollees may For example, the safety of registrants may be reduced by being induced by other drugs. effective drug, and (iii) anticompetitive effects. The OIG has historically cautioned that independent charitable PAPs should be independent of drug manufacturer influence, and the advisory opinion states that the risks associated with PAPs are limited by OIG enforcement actions, Medicare Part D program evaluations, It points out that this is caused by rising drug prices and economic analysis of pharmaceuticals. PAP operation.
OIG’s analysis of sickness funds under the AKS is also shaped by upcoming changes to cost sharing for Medicare Part D enrollees. Starting in 2024, the 5% catastrophic cost-sharing for Medicare Part D enrollees will be eliminated, and starting in 2025, enrollees’ annual out-of-pocket costs for Part D drugs will be capped at $2,000. As a result, the use of the Sickness Fund’s cost-sharing subsidy feature may be reduced, depending on the nature of the applicant’s contribution, the category of expenses under the Sickness Fund, and the number of patients who meet the financial need criteria. may have an impact.
Ultimately, OIG determined that this arrangement did not impose administrative sanctions on applicant under the AKS for the following reasons:
beginning, Disease Funds vary by the proportion of funds spent to support the purchase of donor medicines. The arrangement also incorporates other safeguards that the OIG previously cited as reducing the risk of fraud and abuse. Specifically, (i) defining disease funds based on established medical conditions, (ii) awarding assistance regardless of a particular patient’s treatment plan, (iii) limiting information sharing with donors, and ( iv) Process to verify patient financial eligibility.
Number 2, the Disease Fund provides assistance for financial needs caused by rare diseases. Rather than purchasing donor-manufactured medicines through cost-sharing grants, the majority of the fund supports the cost-sharing of goods and services other than medicines, medical aid, insurance premium assistance, and emergency relief.
Please note that this opinion is only valid until January 1, 2027, due to the upcoming legislative changes described above regarding cost-sharing requirements for Part D registrants.
Important points
As highlighted in previous OIG advisory opinions evaluating charity PAPs, this opinion emphasizes the importance of independence and separation between charities and drug manufacturer donors. This, of course, is emphasized by the OIG’s tongue-in-cheek use of the word “intentionally” when referring to its prior guidance regarding independent charities. It goes without saying, therefore, that pharmaceutical companies donating to such charitable PAPs must ensure that they have policies and procedures in place to ensure that their donations maintain appropriate independence from the charity. Independence naturally increases when donors receive limited information from the charity PAP and charitable donations are made without consideration of the patient’s specific treatment plan. But more than that, the opinion states that neither Complainant nor its contracted third parties have made arrangements to ensure that only certain patients (e.g., those taking donor medication) receive assistance. Emphasis on proof. It is not entirely clear what is meant by “what kind of contract is in place”, but perhaps encompasses the donor themselves and/or other third parties such as patient support hubs or other patient support organizations. It can be interpreted as doing so. The bottom line is that the more layers of separation between the actors providing the donations and those receiving the donations, the better.
In addition, the manufacturer states that the clinical You should be wary of funds designed around recognized medical conditions. , regardless of insurance status. However, this opinion paper makes a very important prediction about the future by emphasizing the importance of support that goes beyond the cost burden of medicines, such as medical aid and insurance premium subsidies. This suggests that leveraging donor funds could potentially reduce fraud and crime. Risk of abuse. This increased OIG oversight is likely related to changes in the annual out-of-pocket maximum for Medicare Part D enrollees, which will expand from purely out-of-pocket assistance to include other aspects of care. This will drive demand for more comprehensive support. Changes in the categories of assistance provided by PAPs due to new out-of-pocket cost limits could change the risk-benefit assessment of charitable PAPs, which OIG has been wary of.
One final observation is OIG’s recognition that this arrangement does not involve a beneficiary-directed CMP because a patient’s eligibility is not dependent on the selection of a particular physician or pharmacy. Therefore, this arrangement does not affect an enrollee’s selection of a particular health care provider. This advisory states that arrangements between manufacturers and charities (in the case of specialty medicines, with their patient support hubs and specialist pharmacies) should never include the transfer of information that might indicate which medicines. Double check that it is not. ) The registrant is currently taking the course.
footnote
[i] 42 USC § 1320a–7b(b).
[ii] 42 USC § 1320a–7a(a)(5).
