On November 20, 2015, OIG issued a favorable advisory opinion, Advisory Opinion No. 15-14, regarding a charitable organization’s arrangement to pay for magnetic resonance imaging (MRI) services for patients afflicted with a specific undisclosed disease.
The advisory opinion was requested by a 501(c)(3) charitable organization that helps financially needy patients, including Medicare and Medicaid beneficiaries, obtain MRIs for the diagnosis and evaluation of their disease. The organization determines financial eligibility based on federal poverty guidelines and provides assistance on a first-come, first-served basis. According to preset criteria, the organization provides two levels of financial assistance. For uninsured patients or patients whose cost-sharing obligations exceed the MRI costs (Full-Pay Patients), the organization pays for the full cost of the MRI services. For patients with at least partial coverage for the MRI services (Co-Pay Patients), the organization assists with patients’ copays and other cost sharing obligations. For Full-Pay Patients, the organization arranges for the provision of services by a local MRI provider that has contracted with the organization to provide services at a discounted rate. Co-Pay Patients are free to obtain services at the MRI provider of the patients’ choice. The organization is funded by donors that include pharmaceutical manufacturers whose drugs are used to treat affected patients.
OIG first considered the financial relationship between the organization and the patients and found that the patient assistance program presented a low risk of fraud and abuse and was not likely to influence any beneficiary’s selection of a particular provider in light of three key safeguards. First, the organization does not make any referrals or recommendations for Co-Pay Patients. The organization does match Full-Pay Patients with contracted MRI providers, but those costs are not reimbursable by Medicare or Medicaid because the organization pays for the full fee in those circumstances. Second, the organization qualifies patients based solely on financial need without considering the identities of their providers or payor sources. Finally, the organization assists all qualified patients on a first-come, first-served basis using preset criteria applied uniformly.
OIG also scrutinized the organization’s relationship with its donors to determine whether the arrangement could serve as a disguised conduit for a pharmaceutical manufacturer to induce patients to use its drugs. OIG concluded that the donors’ contributions entail minimal risk of influencing referrals, citing various safeguards. The arrangement provides no direct funding for the costs of donors’ drugs. No donors serve on the organization’s board or otherwise influence its decision-making. Finally, donors do not receive any data correlating donations with the use of the donors’ drugs or services.
Based on the foregoing, OIG concluded that the organization’s arrangement would not constitute grounds for the imposition of civil monetary penalties under the beneficiary inducements statute, 42 U.S.C. § 1320a-7a(a)(5), and also determined that, although the arrangement potentially could generate prohibited remuneration under the anti-kickback statute, OIG would not impose administrative sanctions.
Advisory Opinion No. 15-14 is available here.
Reporter, J. Gardner Armsby, Atlanta, +1 404 572 2760, garmsby@kslaw.com.
