OIG Issues Favorable Advisory Opinion Regarding Non-Profit Efforts to Provide Financial Assistance and Free Items to Individuals with Disease | King & Spalding

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On May 2, 2022, OIG posted Advisory Opinion 22-10, regarding a proposal to provide financial assistance and free items to individuals with a particular disease. The Requestor, a non-profit organization dedicated to providing resources, services, and support to individuals with a particular disease, proposed to provide financial assistance for certain past MRI tests and to distribute cooling and mobility items to individuals with the disease. OIG determined that it would not impose administrative sanctions in connection with the Anti-Kickback Statute (AKS) or the Beneficiary Inducements Civil Monetary Penalty (CMP) provision.

THE PROPOSED ARRANGEMENTS

The proposed arrangements would only apply to individuals with the particular disease state that the non-profit serves. OIG previously opined favorably on the Requestor’s proposal to assist low-income individuals with obtaining future MRIs. This request proposed to expand the program described in the previous request to provide financial support (up to a specified monetary cap) to individuals who received MRIs in the past six months.
Requestor also sought approval for a program (Distribution Program or Program) to distribute free cooling and mobility items to low-income individuals diagnosed with the disease state, such as cooling vests or accessories (a Cooling Item), and equipment designed to improve safety, mobility, activities of daily living, and wellness (a Mobility Item). Each individual may only receive one Cooling Item and one Mobility Item in a specified time frame. Requestors pay suppliers fair market value to deliver the Cooling and Mobility Items directly to the individual at no cost to the individual. Some of the Cooling and Mobility Items may be reimbursable by a Federal health care program, but the Requestor certified that it is not a provider or supplier and does not bill, directly or indirectly, any payor, including Federal health care programs. The Requestor’s Distribution Program is funded by donations from corporations, individuals and foundations (Donors), including some Donors that manufacture, supply, or furnish items and provide services reimbursable by a Federal health care program (Suppliers).

THE MRI ARRANGEMENT

OIG advised that both proposals would constitute prohibited remuneration, but OIG would not impose administrative sanctions in connection with the AKS or the Beneficiary Inducements CMP provision. OIG determined that the proposal to extend the already-approved MRI program to cover past MRIs, as opposed to only future MRIs, did not change the risk analysis conducted in Advisory Opinion 15-14. OIG concluded that the Proposed Modification presents a minimal risk of fraud and abuse under the AKS, and it would not impose sanctions under the Beneficiary Inducements CMP.

THE DISTRIBUTION PROGRAM

OIG determined that the Distribution Program potentially would generate remuneration in two streams: (1) Donors’ contributions to Requestor; and (2) Requestors’ use of donations to furnish free items to qualifying individuals. Both streams of remuneration could induce Requestor to recommend, or for eligible individuals to self-refer to, items or services manufactured, distributed, supplied, or furnished by a Donor, potentially implicating the AKS. However, OIG found several safeguards in the arrangement that supported its decision not to impose administrative sanctions under the AKS, including that:

  • The Program is unlikely to result in increased costs to the federal healthcare programs or beneficiaries because the Cooling and Mobility items are not billed to any federal healthcare program. The Requestor cannot bill any payor and does not bill any qualifying individual.

  • The Program is unlikely to steer or influence individuals to self-refer to a Supplier in the future for other federally reimbursable items or services manufactured, distributed, or supplied by the Supplier, because nothing would require individuals to order such items or services from a clinical perspective.

  • The Program is sufficiently independent of the donors’ financial interests. Requestor also does not refer individuals to, recommend, or arrange for the use of any particular practitioner, provider, insurance plan, manufacturer, or supplier that is a Donor; or any item or service manufactured, distributed, supplied, or furnished by a Donor.

  • Eligibility determinations under the program are based on objective, uniform criteria without regard to the identify of an individual’s health care provider, practitioner, supplier, prescribed drugs, insurance plan, or referring party, if any.

OIG also concluded that, with respect to the Beneficiary Inducements CMP, Donors’ contributions to the Requestor, and the Requestors’ use of the contributions to furnish items free of charge, could influence individuals to select an item or service for which payment may be made in whole or in part by Medicare or a State health care program. However, for the reasons stated above, OIG concluded that it would exercise its discretion and not impose sanctions under the Beneficiary Inducements CMP.

The Advisory Opinion may not be relied upon by anyone other than the Requestor. A copy of Advisory Opinion 22-10 is available here.

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