October 4, 2010—The Department of Health and Human Services (HHS) Office of Inspector General (OIG) has issued new guidance to health care providers and drug manufacturers on patient assistance programs (PAPs) and also on charitable contributions made on providers’ behalf for using a marketer’s service.
In an August 20 advisory opinion, OIG advised a nonprofit charitable organization that it did not violate the federal anti-kickback statute by helping low-income brain tumor patients pay for their drugs and medical devices. In another opinion issued on July 23, OIG told a marketing company that it did not violate the federal anti-kickback statute by entering into an arrangement with health care providers to make charitable contributions on their behalf.
Patient Assistance Program to Fund Brain Cancer Treatments Approved
In its most recent opinion, OIG held that a charitable foundation’s PAP that helps low-income brain cancer patients pay for their treatments did not violate the law. The federal anti-kickback statute prohibits benefactors from providing something of value to a Medicare or Medicaid beneficiary that could affect the beneficiary’s choice of a provider or service paid for by either program.
The PAP, funded in part by manufacturers of drugs and devices used to treat brain tumors and related conditions, did not run afoul of the law because the law allows industry stakeholders to make charitable contributions to financially-needy patients by contributing to “independent, bona fide charitable assistance programs.” The PAP, the OIG said, used safeguards to ensure that the contributions did not affect the patients’ choice of providers and services. Also, the aid was on a first-come, first-served basis and granted based on patient financial need and other objective criteria.
In addition, any donations made by manufacturers and other contributors to the PAP did not affect patient decision-making because the foundation itself made the contributions and the donors had no control over the contribution process. The PAP operated independently from the rest of the foundation’s activities, OIG noted, and although some members of the foundation’s medical advisory board may have had ties to the manufacturer and pharmaceutical industry, the board had no involvement with the PAP’s activities.
Web-based Scheduling Service Also Cleared
The July 23 opinion dealt with a marketing company’s Web-based service that lets providers schedule educational visits with pharmaceutical, medical and diagnostic product manufacturers. The company encourages providers to use the service by making contributions to their charities of choice.
OIG said the arrangement in question did not violate the anti-kickback statute because it did not give any health care providers an actual or expected benefit. The marketing company made all donations directly to the charity, not the health care provider. Providers would not receive any payment, tax deduction or other economic benefit. In addition, the arrangement prevented providers from selecting charities affiliated with organizations to which the provider belonged.
The opinion also listed potentially problematic contributions that could implicate the anti-kickback statute. Providers, OIG said, should avoid scenarios involving contributions
- to private foundations or charitable groups affiliated with the providers or their family members;
- to groups that employ or compensate the providers or their family members;
- intended to benefit the providers, their family members, or their medical practice;
- to groups that provide benefits to the providers, their family members or their medical practice by way of reduced rates for office space, equipment or staff;
- to groups that have a relationship with the provider, including the awarding of educational or research grants; and
- based on “past or expected prescriptions, orders or purchases of items or services payable by any federal health care program.”