The Department of Health and Human Services (HHS) Office of Inspector General (OIG) posted two similar advisory opinions on January 4, 2016, regarding nonprofit, tax-exempt organizations and the financial assistance they give to the needy for their healthcare. Specifically, the organizations asked OIG if (1) accepting donations for, and (2) disbursing financial assistance to federal health care program beneficiaries for their specific health care expenditures would constitute illegal kickbacks and result in civil monetary penalties. OIG’s opinions state that because of the safeguards the organizations use, the donations and disbursements would not be grounds for imposition of civil monetary penalties under § 1128A(a)(5) of the Social Security Act (“Act”), and while the programs could violate the anti-kickback statute if the requisite intent were present, the OIG would not impose administrative sanctions under §§ 1128(b)(7) or 1128A(a)(7) of the Act.

Advisory Opinion 15-16

A non-profit, tax-exempt charitable organization proposed a program in which it would provide financial assistance to federal health care program beneficiaries for their out-of-pocket expenses related to prescription drugs used to treat two specific diseases, a type of cancer and a type of chronic kidney disease. The organization would administer two separate funds, one each for the disease. A patient’s eligibility for assistance would be determined by financial need, based on the federal poverty guidelines. Assistance would be given on a first-come, first-served basis. Patients would need to have already chosen their treatment and providers before applying for assistance, but they would be able to change treatments and providers while receiving assistance. The organization expects to solicit donations from many parties, including the drug manufacturers who manufacture the patient’s treatment. While donors may specify that their donations go to a specific disease fund, they may not specify that their donations go towards helping someone with a specific course of treatment. Likewise, donors could receive aggregate information about the total amount of donations received and disbursed, but they would not be able to receive information about the specific treatments or patients that were helped through the programs. In addition, the organization’s conflicts of interest rules maintain that no one from a donor would be able to serve on its Board of Directors.

Advisory Opinion 15-17

A non-profit, tax-exempt charitable organization proposed a program in which it would provide financial assistance to federal health care program beneficiaries with their insurance co-payments, premiums, and deductibles related to a specific disease. Patients in stages three or four of the disease, and those who meet the financial eligibility criteria based on federal poverty guidelines would be able to apply for assistance. Assistance would be given on a first-come, first-served basis. Patients would need to have already chosen their treatment and providers before applying for assistance, but they would be able to change treatments and providers while receiving assistance. Similar to the organization in Opinion 15-16, this organization expects to solicit and receive donations from many sources, including the manufacturers who make the different treatments the beneficiaries may take. However, donors would not be able to receive information about the specific treatments or patients that were helped through the programs. In addition, the organization’s conflict of interest rules maintain that no one from a donor would be able to serve on its Board of Directors.

Analysis

In both cases, the OIG examined the programs by first evaluating the donor contributions and their risk of influencing referrals, and then looking at the organization’s assistance to patients and its probability of fraud and abuse in light of the Act. With respect to the donor’s contributions, OIG found that there was a minimal risk of influencing referrals to patients who receive assistance under the programs. First, the donors would not be able to control the organization or the programs themselves, patients would have already chosen their course of treatment before applying, and finally, that donors would only receive aggregate data. With respect to Advisory Opinion 15-17, OIG further opined that no donor would be able to influence the symptoms or disease states for eligible patients more specifically than stages 3 or 4 of the disease. Given these facts, OIG stated that the donor’s contributions would not be payments for influencing referrals.

OIG next examined the programs’ probability of fraud and abuse in light of the Act. A patient’s eligibility for the assistance programs is determined only on financial need, without considering the patient’s treatment or providers, and that the assistance is given out on a first-come, first-served basis. Given these facts, OIG stated that there is a low risk of fraud and abuse, and the programs are not likely to influence a beneficiary’s selection of a specific treatment or provider.