Recently, many stakeholders in the healthcare industry have expressed interest in implementing programs that provide funding to help patients with insurance premium payments.  Until last week, it was unclear whether any type of premium assistance programs would be permissible under federal law.  Finally, in Office of Inspector General (OIG) Advisory Opinion 13-19 posted on December 2, 2013, the government provided some limited guidance on this issue.  The OIG concluded that it would not impose civil monetary penalties or Anti-Kickback Statute administrative sanctions with regard to the requestor foundation’s premium assistance program and the program that covers the cost of disease related services and items not covered by insurance.   

The premium assistance program provides funding in the form of grants for primary and/or secondary insurance premiums generally for the calendar year but in no way covers insurance copayments, deductibles, and coinsurance.  The program is limited to patients with a diagnosis of the rare disease the requestor foundation focuses on and who meet the requirements of the foundation’s financial need policy.  The OIG found that the particular design and administration of the premium assistance program reduces the risk of improper beneficiary inducements and presents a low risk of fraud and abuse for the following reasons:

  • the foundation is an independent charitable organization,
  • no donor exerts any direct or indirect control over the foundation, 
  • patients’ choice of health care providers, suppliers, and insurers is preserved,
  • the foundation does not make referrals,
  • assistance is based on a consistently applied uniform measure of financial need, and
  • donors do not receive data that would allow them to extrapolate correlation between donations and product use.

The OIG noted that donations for a rare disease with a limited number of treatments increases the risk of improper beneficiary inducements but distinguished the premium assistance program at issue because there are many products from multiple manufacturers to treat the rare disease, there is no requirement to receive or seek any particular treatment, and this program expands patients’ freedom of choice.  While this guidance is certainly helpful, it is important to recognize the limitations of this opinion and ensure that any proposed program is reviewed for compliance with fraud and abuse laws.