Charitable organizations that want to provide financial assistance to patients for the costs of health care are challenged with ensuring that their programs do not run afoul of federal fraud and abuse laws. On June 4, 2015, the Office of Inspector General (OIG) of the Department of Health and Human Services posted OIG Advisory Opinion No. 15-06 (the Opinion) addressing this issue. In the Opinion, the OIG concluded that it would not issue civil monetary penalties or administrative sanctions against a tax-exempt charitable organization (the Requestor) for its proposal “to provide financial assistance to individuals with chronic diseases … in order to assist with the costs of health insurance and drug and devise therapies” (the Proposed Arrangement). 

The Opinion is the second advisory opinion issued this year addressing a charitable patient assistance program, and only the second since OIG issued its Supplemental Bulletin on May 30, 2014, updating the OIG Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees that was published in the Federal Register on November 22, 2005. The Health Care Counsel blog post regarding the first opinion can be found by following this link. Like all advisory opinions, the June 4 Opinion may be relied upon only by Requestor, so no other organization with a similar charitable program can use it to ensure against OIG action.  Even so, the Opinion provides insight into what the OIG considers important in coming to its conclusion that the Proposed Arrangement would not lead to sanctions. 

Notable OIG Considerations

Of note, the OIG permitted the Requestor to establish disease funds that provide financial assistance exclusively to patients covered under Medicare, Medicaid, or other Federal health care programs, as defined by 42 U.S.C. § 1320a-7b(f), subject to the safeguards set forth in the opinion. The OIG spent considerable time assessing and reviewing the delineation of disease funds to ensure that all funds were for broadly defined disease states based on widely recognized clinical standards, without reference to specific symptoms, severity of symptoms, method of administration of drugs, stages of a particular disease, or type of drug or device treatment. 

The one exception was metastatic cancer. The OIG permitted a fund focused on the metastatic stage of cancer so long as the fund also provided support, at a minimum, for all drugs approved by the U.S. Food and Drug Administration (“FDA”) for the type of cancer (not limited to drugs expressly approved for the metastatic stage of the cancer). In addition, the OIG recognized that Requestor could maintain a disease fund that provides copayment assistance for only one drug or device, or only the drugs or devices made or marketed by one manufacturer or its affiliates, so long as such fund also provided enrollees with financial assistance for any other drugs used to manage the disease, including symptoms of the disease and side effects from treatment. The OIG reasoned that any such single drug fund that also covered supportive drug therapies could not be utilized by the manufacturer of a drug therapy as an improper conduit solely to support federal health care program beneficiaries using its drug. 

Indirect Guidance for Other Entities

Although the Opinion can be replied on only by Requestor, any entity interested in creating a charitable program that might implicate the  fraud and abuse laws should carefully review this Opinion and other relevant opinions (as well as the Supplemental Bulletin and the Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees) to gain insight into OIG’s judgment about what types of patient assistance programs are permissible.