OIG Clears Two Charities’ Drug Co-Pay PAPS for Takeoff

by admin | June 22, 2010 8:38 pm

June 22, 2010 – A federal watchdog agency has given two nonprofit groups the all-clear to help poor and underinsured patients with a wide number of diseases or conditions meet their cost-sharing obligations for a number of prescription drugs.

In a pair of advisory opinions published in late May[1] and early June[2], the Department of Health and Human Service’s Office of Inspector General (OIG) concluded that neither group’s proposed co-pay patient assistance program (PAP) would impermissibly influence a Medicare or Medicaid beneficiary’s choice of providers or services. And while both might conceivably give rise to kickbacks, the OIG said it would not impose administrative sanctions against either.

The agency identified neither charity in its opinions nor gave any indication of the two new programs’ scale. In any case, the PAPs could provide some measure of financial relief to safety-net health care providers, which often pay the unmet pharmacy costs of the poor and underinsured.

Novel Debit Card Arrangement

The first PAP will use an apparently first-of-its-kind MasterCard debit card arrangement to help underinsured patients with many different diseases or conditions make co-payments for, it appears, whatever drugs their physician prescribes. It is aimed at beneficiaries covered by Medicare Part B, Medicare Part D, so-called Medigap insurance, and Medicare Advantage. Many manufacturers have similar debit card co-pay programs but they typically subsidize the purchase of just one of the manufacturer’s products for a single disease or condition.

The charity that runs the PAP solicits cash or cash-equivalent donations from individuals, corporations, foundations and drug manufacturers. It is creating an unspecified number of “disease funds” to which patients can apply for aid on a first-come, first-served basis.

Patients’ identities will be shielded from the donors (and vice versa) and they will have complete freedom of choice regarding their drug products, providers, insurers and treatments. Participants will be selected on the basis of medical condition, financial need and other objective criteria. At the point of sale, the pharmacist will transmit a participant’s primary insurance information and debit card number to a pharmacy benefits manager that will in turn process the claims. Built-in safeguards will strictly limit participants’ debit card purchases to products with a National Drug Code associated with the disease for which the participant was enrolled.

Aid for Specialty Drugs, Genetic Tests

The second PAP is geared toward helping financially needy individuals diagnosed with multiple sclerosis, cancer or rheumatoid arthritis. It includes, but is not limited to, Medicare and Medicaid beneficiaries.

This PAP, like the other, is creating separate funds for each of the three disease plus a fourth for genetic testing associated with one of the three. Patients enrolled in the PAP would get grants to help them meet cost-sharing obligations for “a broad range” of “specialty medications” that are both costly and complicated to administer. They could also use their grants to pay 100 percent of the cost of a genetic test that a physician prescribes to determine an effective course of treatment.

The charity would pay pharmacies or labs directly for the enrollees’ drugs or tests in most cases or reimburse enrollees if their chosen providers do not accept third-party payments.

“These rulings are important because they indicate that the OIG will allow PAPs to experiment with new ways of delivering assistance to qualified patients so long as the PAPs continue to meet certain basic criteria set forth by the OIG in prior rulings,” says Mark Fitzgerald, a principal with the law firm Powers, Pyles, Sutter and Verville, who follows PAP compliance issues closely for Safety Net Hospitals for Pharmaceutical Access.

Source URL: https://340bemployed.org/oig-clears-two-charities-drug-co-pay-paps-for-takeoff/

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