Office of the Inspector General ("OIG")

On December 28, 2023, the Office of Inspector General (the “OIG”) issued a favorable Advisory Opinion (No. 23-15) (the “Opinion”) to a consulting vendor (the “Requestor”) that wanted to provide up to $75 in gift cards to physician practices in exchange for referring the Requestor’s practice optimization services (e.g., workflow and performance assessment, data analytics, and certain Medicare eligibility and performance assistance). Among other things, the Requestor: (i) did not itself provide any services that were eligible for reimbursement under any Federal healthcare program to any of its clients, (ii) did not have an ownership or investment interest in any entity that provided items or services paid for by any Federal healthcare program, and (iii) received compensation from the physician practices that did not vary based on whether the physician practices received a greater or lesser reimbursement from Medicare based on the Requestor’s services. The Opinion concluded that this proposed arrangement would not generate prohibited remuneration under Section 1128B(b) of the Social Security Act (the “Act”), also known as the Federal Anti-Kickback Statute (“Anti-Kickback Statute”), and thus OIG would not impose administrative sanctions under Section 1128A(a)(7) (exclusion) or Section 1128(b)(7) (civil monetary penalty) of the Act on the Requestor. As always, the Opinion stipulated that it may only be relied on by the Requestor on the specific facts presented to OIG, and that certain state and federal laws may continue to limit similar arrangements. However, the Opinion indicates that the tight scope of potential marketing options for physician practice vendors could expand a bit for those who are similarly situated to the Requestor.Continue Reading New Marketing Possibilities for Vendors Contracted with Medicare Providers and Suppliers Following OIG’s Favorable Advisory Opinion on Limited Referral Bonuses

The Department of Health and Human Services Office of Inspector General (OIG) recently announced changes to its process for informing healthcare industry stakeholders of new or updated Compliance Program Guidance (CPG). Historically, sector-specific CPG has been published in the Federal Register. Going forward, the OIG will publish all current and updated CPG on its website.Continue Reading OIG’s Modernization of Compliance Program Guidance: What to Expect

On March 24, 2023, the Office of Inspector General (“OIG”) issued Advisory Opinion 23-03 (the “Opinion”), in which it decided not to impose sanctions on an Arrangement to provide prepaid gift cards to patients for certain preventative screening tests (the “Arrangement”).Continue Reading New OIG Opinion Permits Gift Cards to Beneficiaries in Limited Circumstances

On December 5, 2022, the Department of Health and Human Services (“HHS”), Office of Inspector General (“OIG”), released their Semiannual Report to Congress for the period beginning on April 1, 2022, and ending on September 30, 2022 (the “Semiannual Report”).[1]Continue Reading OIG Shines a Spotlight on Nursing Homes, Opioid Misuse, and Health Equity in the FY2022 Semiannual Report

On October 5, 2022, the Office of Inspector General (“OIG”) posted Advisory Opinion No. 22-19 (the “Opinion”), which limits the ability of pharmaceutical manufacturers to offer cost-sharing subsidies to Medicare Part D (“Part D”) beneficiaries via 501(c)(3) charities without running afoul of the Federal Anti-Kickback Statute (the “AKS”).Continue Reading OIG Limits Pharmaceutical Manufacturers’ Ability to Offer Drug Cost-Sharing Subsidies

On April 25, 2022, the Office of Inspector General (“OIG”) issued Advisory Opinion No. 22-07 which evaluated the risk of fraud and abuse under the federal anti-kickback statute (“AKS”) posed by an arrangement involving physician-ownership of a medical device company. The opinion identified six characteristics of the arrangement which greatly reduced the risk of fraud and abuse.Continue Reading OIG Issues Favorable Advisory Opinion for Physician-Owned Medical Device Company

On Thursday, March 16, the Office of the Inspector General for the Department of Health and Human Services (“OIG”) issued OIG Advisory Opinion (“AO”) No. 22-05, relating to subsidization of certain Medicare cost-sharing obligations in the context of a clinical trial involving medical devices (the “Proposed Arrangement”). This is the third AO in a recent series of AOs (see AO 21-17 on November 19, 2021 and AO 21-13 on October 4, 2021) focused on Medicare cost subsidies in a clinical trial setting for serious conditions that affect large portions of the population in the US. Like these other AOs, OIG found that while the Proposed Arrangement could generate fraud and abuse risks under both the Federal anti-kickback statute (i.e., Section 1128A(a)(7) and 1128B(b) of the Social Security Act (“Act”)) and the Beneficiary Inducements CMP (i.e., Section 1128A(a)(5) of the Act), the Proposed Arrangement nevertheless presented a minimal risk of fraud and abuse under the law on the facts presented. Medical device manufacturers should pay close attention to this trend when considering trial designs and patient populations.
Continue Reading OIG Advisory Opinion Alert: Yet Another Favorable Decision for Medical Device Manufacturers

On November 30, 2020, the United States Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) issued a final rule (“Final Rule”) that makes significant changes to the federal Antikickback Statute (“AKS”) safe harbor regulations as such regulations relate to the cost of prescription drugs as covered by the Medicare and Medicaid programs.  More specifically, the Final Rule amends the AKS discount safe harbor (“Discount Safe Harbor”) at 42 C.F.R. §1001.952(h) to eliminate safe harbor protection for drug discounts and rebates offered by pharmaceutical manufacturers to pharmacy benefit managers (“PBMs”) and  Medicare Part D prescription drug plan (“Medicare Part D”) sponsors.  In addition to making significant changes to the Discount Safe Harbor, the Final Rule creates two new pharmaceutical-related safe harbors: (i) a safe harbor applicable to certain prescription drug point-of-sale discounts as offered to Medicare and Medicaid beneficiaries to reduce their direct out-of-pocket prescription drug costs (the “Point-of-Sale Safe Harbor”) and (ii) a safe harbor applicable to flat fee arrangements paid by drug companies directly to PBMs for PBM services (the “PBM Service Fees Safe Harbor”).
Continue Reading Eleventh Hour Rulemaking: HHS Eliminates Safe Harbor Protections for PBM Drug Rebates and Creates Two New Safe Harbors for Point-of-Service Discounts and PBM Fixed-Fee Arrangements

The U.S. Department of Defense (“DOD”) claims that fraud and abuse is inhibiting the ability of the Defense Health Agency (“DHA”), the agency responsible for administering TRICARE, to support and deliver “integrated, affordable, and high quality health service to all DOD beneficiaries” and to be “a responsible steward of taxpayer dollars.” Noting that the Department of Justice (“DOJ”) has limited resources to prosecute those who commit fraud and abuse against the TRICARE program, the DOD now seeks to step in and ramp up enforcement.
Continue Reading The Military Health Care Fraud and Abuse Prevention Program: The Department of Defense Issues Proposed Regulations regarding TRICARE and Civil Monetary Penalties

On February 6, 2019, the Office of the Inspector General of the U.S. Department of Health and Human Services (the “OIG”) published in the Federal Register a proposed rule (the “Proposed Rule”) that, if made final in its current form, would (i) amend the Anti-kickback Statute (“AKS”) Discount Safe Harbor to explicitly exclude discounts relating to price reductions or other remuneration offered by a pharmaceutical manufacturer to a Medicare Part D plan sponsor (“Plan Sponsor”), a Medicaid managed care organization (“MCO”), and/or a pharmacy benefit manager (“PBM”) under contract with such a sponsor or organization; and (ii) add two new safe harbors: a “Discounts Offered at the Point-of-Sale” safe harbor (“Point of Sale Safe Harbor”) and a PBM Fee Arrangement Safe Harbor (“PBM Safe Harbor”).
Continue Reading HHS Proposes Rule to Eliminate Safe Harbor for PBM Drug Rebates

The U.S. Department of Health & Human Services, Office of Inspector General (OIG) recently issued Advisory Opinion No. 13-03, declining a clinical laboratory company’s proposed plan to provide various laboratory services to physician practice groups for those patients of the physician practices not covered by a federal healthcare program. Although the proposed arrangement only includes patients who are not covered by federal health care programs, the OIG opined that the physician practices would receive prohibited remuneration and that the proposed arrangement could affect the decision-making of the practices’ physicians, leading to prohibited referrals for laboratory services covered by a federal healthcare program.
Continue Reading OIG Opinion 13-03