OIG Provides Guidance on Health Care Assistance to Needy

Health Law Alert

December 17, 2015
Health Law Alert

The Office of Inspector General (“OIG”) has posted two publications over the last six weeks relating to providing financial and other assistance to the financially needy. Taken together, these publications give guidance as to what charitable organizations may do to promote access to health care services to the financially needy.

The most recent publication posted on December 7, 2015, modifies previous Advisory Opinion 07-11 issued in 2007. In 2007, the OIG issued a favorable opinion regarding a particular charity’s operation of a Patient Assistant Program (“PAP”) to help financially-needy cancer patients pay for their drugs to treat certain types of cancer, as well as certain conditions incident to cancer therapy. In a letter to that particular charitable organization in 2014, the OIG highlighted certain areas of concern that would have to be modified for the charity to retain a favorable advisory opinion for the PAP. The OIG indicated that the charity must address the concerns through certain certifications.

The second OIG posting, OIG Advisory Opinion No. 15-14, was dated November 20, 2015. In this Advisory Opinion, the OIG reviewed a nonprofit tax-exempt charitable organization program to help financial needy patients, including Medicare and Medicaid beneficiaries, to obtain magnetic resonance imaging (“MRI”) for the diagnosis or ongoing evaluation of a certain disease. The 501(c)(3) charitable organization was dedicated to providing resources, services and supplies for patients with a specific disease.

To be eligible for assistance under the arrangement, the patient must have a physician’s order for an MRI and meet certain financial need criteria based on the Federal Poverty Guidelines. The criteria was verifiable and applied in a consistent manner, with assistance awarded on a first-come, first-served basis for any financially-qualified patient who has not received subsidized MRI services within the previous 24 months, to the extent that such funding is available.

The requestor certified that it does not refer patients to, recommend, or arrange for the use of any particular practitioner, provider, supplier or insurance plan that is a donor or affiliate of any donor; or refer patients to, recommend, or arrange for the use of any product or services of a donor or affiliate; and does not recommend the use of any product or services of a donor or affiliate.

The charity is organized such that the requestor solicits donations from its regular donor sources, which include corporations such as pharmaceutical manufacturers, as well as individuals and foundations. All donations are in the form of cash or cash equivalents. The requestor is also governed by an independent Board of Directors. No donor or affiliate donor exerts direct or indirect influence over the requestor’s board.

The OIG concluded that industry stakeholders can contribute effectively to the health care safety net for financially needy patients by contributing to independent, bona fide charitable assistance programs. The OIG concluded that for several reasons, it felt that the arrangement involved only minimal risk of donors’ contributions influencing direct or indirect referrals by requestors.

Similar to the modification of the Advisory Opinion 07-11, the OIG felt that this arrangement would not constitute grounds for the imposition of civil monetary penalties, and while it could potentially generate prohibited remuneration in the Medicare or Medicaid statute if the requisite intent to induce or reward referrals was present, the OIG would not impose administrative sanctions in connection with the arrangement.

The assessment made by the OIG involved the following key criteria: (i) independent boards; (ii) that made their financial assistance available in uniform and consistent manner; (iii) to those in need without regard to who the provider was; (iv) for any recognized FDA-approved drug or service for a particular disease category.

For further information you may contact Roy M. Bossen or your regular Hinshaw attorney.