OIG Issues Favorable Advisory Opinion on Manufacturer-Provided Travel Assistance

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Highlights

  • The U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion No. 21-08, a favorable opinion authorizing a manufacturer of gene therapy to provide transportation, lodging and meal assistance to qualified patients and caregivers obtaining treatment for a rare genetic condition.
  • The Advisory Opinion showcases the OIG's justification of an arrangement that promotes access to care and presents a low risk of fraud and abuse.
  • The Advisory Opinion also suggests a departure in the government's perspective on similar cases and offers insight into the OIG's expansive interpretation of all possible forms of remuneration.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) on July 8, 2021, issued Advisory Opinion No. 21-08, a favorable opinion authorizing a manufacturer of gene therapy to provide transportation, lodging and meal assistance to qualified patients and caregivers associated with the manufacturer's treatment of a rare genetic condition at one of a relatively few centers in the country that are qualified to administer the manufacturer's drug. In concluding that while the arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (AKS) if the requisite intent were present, the OIG determined that, based on the facts submitted by the requestor, it will not impose administrative sanctions. The specific features underlying this arrangement arguably are narrower than the facts present in most OIG advisory opinions. Nonetheless, Advisory Opinion 21-08 suggests a departure in the government's perspective on similar cases and offers insight into the OIG's expansive interpretation of possible forms of remuneration.

Specifically, the requestor's gene therapy offers a one-time treatment of a rare, inherited retinal genetic disorder for patients who comprise a small, objectively identifiable population and for which there is no other pharmacologic treatment. Prior to being deemed eligible for the requestor's drug, however, a patient must obtain a genetic test, undergo an initial evaluation by the treating physician at an approved treatment center, receive surgical injections in each eye at least 6 days apart and then attend a follow-up post-operative appointment. Per the therapy's U.S. Food and Drug Administration (FDA) label, patients are instructed to lie on their backs for as long as 24 hours after each injection and avoid air travel or high elevations for a week or longer until air bubbles that may have formed during each injection dissolve. Currently, there are 10 treatment centers qualified to administer the drug, and the requestor estimates that there will be only a maximum of up to 18 qualified treatment centers in the United States.

Under the arrangement, the requestor offers qualified patients and one caregiver assistance with transportation, lodging and meals associated with the initial consultation, the administration of the drug and one follow-up appointment. To be deemed eligible to participate in the arrangement, patients must live a certain distance away from a qualified treatment center and have a household gross income equal to or below 600 percent of the Federal Poverty Level. The arrangement also contains the following safeguards: if another third-party offers the patient any travel-related coverage, the requestor will not duplicate such coverage; receipts are required for reimbursement; the requestor, through a vendor, arranges economical and modest modes of transportation and hotel rooms; the length of hotel stay has limits and is determined by the treating physician; the requestor does not advertise the arrangement; and eligible patients are required to not request reimbursement from a Federal Healthcare Program.

This Advisory Opinion is noteworthy on several counts. For starters, the OIG found that the risk of fraud and abuse is low because the arrangement would foster access to an important treatment. Given that the U.S. Department of Justice (DOJ) has been aggressive (and highly successful in terms of achieving a number of settlements for significant sums) in investigating contributions made by certain pharmaceutical companies to certain copay assistance foundations, including pharmaceutical companies and copay assistance foundations in the ophthalmic medicine space, this Advisory Opinion bears special scrutiny.

Apparently, DOJ did not believe that access to important medications was enough to forestall its, to date, highly successful series of investigations and settlements regarding contributions by certain manufacturers to certain copay assistance foundations. Perhaps what distinguishes this arrangement from the DOJ investigation is the clear clinical need for this particular drug (including a genetic test) and the label's indication requiring being in or near an administering facility in order to receive the eye injections at the correct time intervals and to be monitored by the treating physician after the injections.

Of course, the access issues discussed above are wholly different in the copay assistance contribution context than in the transportation reimbursement arrangement that is the subject of this Advisory Opinion. However, given the DOJ's aggressive approach to access issues in the copay assistance fund contribution context, it is heartening to see OIG take a measured and reasoned approach to the important access issues inherent in the transportation reimbursement arrangement.

Another promising aspect of this arrangement is that the OIG appears to value the need for patients to access this therapy because the OIG issued a favorable opinion, notwithstanding that the travel-related assistance is provided to patients who earn 600 percent of the Federal Poverty Level. Given that many Advisory Opinion arrangements have substantially lower thresholds, equal to about 200 percent of the Federal Poverty Level, this Advisory Opinion evidences the OIG's willingness to focus on the circumstances underlying the determination of financial need.1

Then again, the particularities of the underlying condition and one-time treatment, the limited number of qualified treatment centers, the lack of other pharmacologic treatments and the adoption of various safeguards may justify the 600 percent Federal Poverty Level. However, such specific underlying facts also may render the Advisory Opinion limited in applicability.2

Finally, another remarkable aspect of this Advisory Opinion is its hint at how the OIG may be taking an even more expansive view of its interpretation of "remuneration." The AKS defines remuneration as "anything of value," and the AKS prohibits remuneration from being offered, given, solicited or received, directly or indirectly.3 However, it was surprising to read the OIG's concern regarding potential indirect remuneration offered to treatment centers and treating physicians in an Advisory Opinion wherein transportation, lodging and meal assistance is provided directly by a manufacturer to patients.

The OIG explained that "because travel, lodging, and other assistance Requestor offers beneficiaries allows them to travel to, and stay near, a Center that the beneficiaries otherwise may not have selected for treatment, this assistance constitutes remuneration to the Centers and the Treating Physicians, in the form of the opportunity to earn fees related to administering the Drug, that may induce Treating Physicians to order the Drug."4 While additional fees for the treatment center and/or treating physicians may be an unintended and incidental benefit of the arrangement, it is hard to imagine that the "opportunity" to earn more fees, in this context, was knowingly devised as a form of remuneration, or that such "opportunity" would, in fact, interfere with clinical judgment to induce physicians to order a drug for which a rare genetic disorder must be present.

Notwithstanding, by identifying an opportunity as indirect remuneration, the OIG is signaling its intent to broadly analyze all possible forms of remuneration, even in factually narrow arrangements with the seemingly most straightforward forms of remuneration. As such, even though Advisory Opinion 21-08 is a favorable opinion, it is a call to entities within the healthcare space and their counsel to carefully consider all incidental benefits as possible remuneration and to structure arrangements with the safeguards necessary to mitigate such risk.

Notes

1 In 2021, the Federal Poverty Level is equal to $26,500; 600 percent of that is $159,000.

2 While all Advisory Opinions are applicable only to the requestor, common practice is to analyze Advisory Opinions to glean an understanding of how the OIG might analyze another arrangement. The more similar an arrangement is to one described in an Advisory Opinion, the more likely the OIG would have a consistent interpretation. But here, where the facts are so specific, it is unlikely that the facts underlying a similar arrangement involving patient travel assistance would be easily replicated to necessarily obtain the same favorable opinion.

3 42 U.S.C. 1320a–7b(b).

4 OIG, A.O. 21-08, § II.B.1 (emphasis added).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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