April 5, 2023 | By Mary Kohler in Bloomberg Law
Health-care attorney Mary Kohler explains the intricacies of federal law and guidance on patient assistance programs and how compliance departments might navigate sometimes-unclear enforcement priorities.
In March, the Senate held pricing hearings and also took aim at industry patient assistance, accusing programs of being too complex. The enrollment forms say it all.
But free goods can implicate two federal laws—the Anti-Kickback Statute, prohibiting remuneration for referrals, and the beneficiary inducement provisions of the Civil Monetary Penalties law, prohibiting “steering” patients to specific providers.
And while “patient assistance” usually implies help for the financially needy, it’s part of a broader set of patient support programs that can include copay assistance and enabling insured patients to begin therapy while pursuing coverage (Start Programs). While related, each has its own AKS and CMP analysis.
A few weeks before the Senate hearing, the HHS Office of Inspector General issued a new advisory opinion, offering a valuable glimpse into the agency’s thinking on Start Programs. Some senators’ ideas seem to conflict with OIG’s. In the aftermath, lawyers and business leaders are left to do their own thinking.
The Golden Rule: Purpose
OIG warns programs should not be overly generous or used as marketing tools. Its unfavorable 2018 opinion cites a 15-year price history that took the drug from $40 to $38,892, and Federal Trade Commission allegations the company stifled competition to maintain pricing. OIG agreed the program helped patients, but still saw potential marketing motives, and harm to federal health care programs.
Start Programs do help patients, but law and compliance leaders should dig beyond cursory answers.
Product Use and Coverage Delay
OIG’s Start Program opinions all begin with the same premise. Qualifying patients must be diagnosed by a health-care professional, prescribed product for an FDA-approved use, insured, and experiencing a quantifiable coverage delay. Start Programs are distinct from copay and patient assistance, and their structure and operations should reflect that.
Product and Coverage Need
Start Programs should be tailored to the coverage issues and products they serve. In the new opinion, the disorder had a statutory 48-hour window for insurers to decide coverage. The program was only triggered after this window closed. And free product should end with coverage. OIG’s favorable opinions both permitted one refill, but the programs had to verify insurance progress first. Neither was renewable.
Ask how long it will take to identify the coverage issue and resolve it. The program’s triggering point and free product supplied should align with these metrics.
Clear Terms and Conditions
OIG assumes patients pursue coverage diligently, free product ends with the insurer’s decision, and no one claims out of pocket expense credit or seeks reimbursement. AKS matters should be communicated effectively, but they can get lost in other disclosures such as privacy and data use consents. Senators criticized the confusing paperwork. They have a point.
Think beyond fine print disclosures. Manage participant expectations in clear, plain language to avoid surprises and tough decisions when an HCP or patient mis-executes.
Ask OIG’s Key Questions
OIG’s AKS analysis boils down to if the program will lead to overuse, if it will seed future product use, if the prescriber will benefit, any increased costs to federal health-care programs, and if the vendor will benefit.
Any of these can be a derailer. Analyze the facts and don’t forget CMP. Sending patients to a specific pharmacy to get the product may be a program necessity, but it can implicate the law. Still, OIG typically finds low risk.
Care with Vendors
Issues can arise when a single pharmacy handles the Start Program and commercial distribution. OIG’s 2015 opinion relied on separate channels to conclude the program’s pharmacy would not benefit from later sales. In the new opinion, OIG OKs the pharmacy handling both because the product has small volume, and the pharmacy is the only source.
But OIG doesn’t explain how the first dose goes from being “presumably commercial” at the time of injection to program stock after denial. These details matter. And pharmacies don’t typically dispense without payment certainty. A one-stop pharmacy may be a practical necessity, as another player would complicate things. But the new opinion only says the pharmacy has safeguards for managing both channels and certified that it will not divert free product or submit claims.
Consider distribution issues. Specialty pharmacies should have controls to ensure execution in line with expectations. Establish operating rules and manage vendors.
Watch Company Communications
OIG frowns on marketing of patient programs, but prior opinions only mention direct-to-consumer ads. The new opinion leans in on specifics, with certifications requiring the website and program materials be educational, not promotional, and approved by the company’s medical, legal, and regulatory functions. HCPs will not market their own participation in the program.
Companies may want to assess current materials and approval processes.
Consider Administration Fees
HCPs cannot bill for free goods. The injectable in the new opinion is self-administered, but HCPs might give the first dose. OIG says HCPs may not bill for administration services, even if they administer the first dose.
This won’t be intuitive for an HCP who—under OIG’s factual assumptions—likely gave the injection assuming everything was covered. Also, the patient might never inform the HCP of an insurance delay that only became known after the office visit.
Thornier questions lurk for therapeutics administered in-office. What if the product required a two-hour infusion? Monitoring for a serious adverse event? What if the HCP had to manage the AE? Or admit the patient? Clearly the causal chain of free drug ends at some point. The new opinion is silent on these issues. But the company is expected to communicate the billing restrictions.
HCPs might have questions. Senator Bill Cassidy (R-La.) did, implying patient assistance programs could pick up these fees. OIG’s thoughts on his ideas would be interesting.
The new opinion echoes familiar themes, but a detailed read suggests a higher standard for some Start Program elements. And the Senate may have muddied the water.
Still, it’s encouraging OIG continues to value patient support. Without Start Programs, timely treatment might otherwise be jeopardized by the realities of a cumbersome access environment.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information Mary Kohler is founder and principal of Kohler Health Law, where she advises life science companies on health care law and compliance matters.
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Reproduced with permission. Published April 5, 2023. Copyright 2023 Bloomberg Industry Group 800-372-1033. For further use please visit https://www.bloombergindustry.com/copyright-and-usage-guidelines-copyright/
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