The U.S. Department of Health and Human Services Office of Inspector General (OIG) has offered several new points of guidance for medical device manufacturers in the process of designing patient subsidies for clinical research studies. Released on June 4, 2015, Advisory Opinion 15-07 indicates that clinical studies involving subsidies paid to patient participants are less likely to run afoul of the federal Anti-Kickback Statute (AKS) or the federal prohibition on beneficiary inducements if the subsidies serve to protect the study’s methodological integrity, if the study is designed in consultation with the Center for Medicare & Medicaid Services (CMS), and if the study delineates specific patient enrollment criteria and physician protocols.
The requestor, a medical device manufacturer, developed a clinical study involving use of its specialized instrument in a spinal procedure called percutaneous image-guided lumbar decompression (PILD). The study was designed in consultation with CMS following an announcement from CMS that it would allow for coverage of the manufacturer’s procedure under the Coverage with Evidence Development (CED) Program. According to the Advisory Opinion, the study was designed to test the effectiveness of the manufacturer’s instruments in the PILD procedure. The study would consist of a controlled double-blind trial, with 80 patients assigned to a treatment group and another 40 patients assigned to a control group for which no therapeutic treatment was performed (characterized by OIG as “sham procedures”).
The requestor proposed to provide two types of subsidies to patients participating in the study. First, it proposed to cover the co-payments for all Medicare beneficiaries enrolled in the study, on the grounds that leaving the treatment group to cover their own co-payments would compromise the study’s design by revealing which patients were in the treatment group and which were in the control group. Second, the requestor proposed to pay the costs of the PILD procedure for any control-group participant who was deemed a failure at the end of the study but who still wished to undergo the procedure. The requestor justified this second set of subsidies on the grounds that they were necessary to incentivize adequate levels of patient participation.
The OIG concluded that the proposed arrangement did not raise a significant risk of violating the AKS or the beneficiary inducement prohibition.
- First, the OIG took comfort from the fact that the study was in line with CMS policy goals, because it was designed in consultation with CMS under the CED Program and because the results would assist CMS in determining whether PILD is reasonable and necessary for purposes of eligibility for broader Medicare coverage.
- Second, the OIG reasoned that the purpose of the subsidies was not to induce or reward health care referrals but rather to protect the study’s integrity and encourage adequate levels of patient participation. The OIG did strongly suggest, however, that the arrangement may have violated the AKS if the manufacturer had intended the subsidies to induce or reward such referrals.
- Third, the proposed arrangement would not operate in conjunction with any other arrangement with patients, physicians, or other parties in a manner resulting in referrals or induced use of the PILD procedure for non-study purposes.
- Finally, the OIG indicated that the enrollment criteria and physician protocols detailed in the study, as well as the limitation of subsidies to only a small, predetermined number of patients, minimized the risk of increased costs to the federal health care programs.
In its analysis, OIG did not specifically address the federal prohibition on routine waivers of co-payments.
Strategy: Designing Subsidy Programs for Clinical Studies
This Advisory Opinion suggests that there are pathways for medical device manufacturers to design subsidies for clinical studies reimbursed by the federal health care programs without running afoul of the AKS or beneficiary inducement prohibition. First and foremost, it is critical that any subsidies provided serve the objectives of the study itself, such as by protecting the integrity of the study’s methodology or incentivizing an appropriate level of patient participation, rather than serving as impermissible inducements to principal investigators, their institutions, or patients. Further, the OIG appears to favorably view consultation with and subsequent approval of the study from CMS, certainly under the CED Program but perhaps under other circumstances as well. Finally, the OIG appears to have a positive view of subsidy programs in which the manufacturer has thoughtful and appropriate patient enrollment criteria as well as participating physician protocols.
While the OIG may continue to scrutinize subsidies paid to clinical study patients going forward, Advisory Opinion 15-07 at least provides some points of guidance that should inform the design of any future subsidy programs.