OIG Issues Advisory Opinion on Charitable Organization Providing Financial Support for PatientsPhysicians may be surprised to find there may be liability under Fraud and Abuse Laws based on donations to a patient assistance program. The risk of liability may depend on whether contributions to a patient assistance program would influence indirectly or directly referrals by a program or whether the financial assistance provided by a program would influence a patient’s selectin of a particular provider.
On November 13, 2015, the OIG issued Advisory Opinion 15-14 regarding a proposed arrangement by a 501(c)(3) charitable organization’s patient assistance program to help financially needy patients, including those covered under Medicare and Medicaid, obtain MRI’s for the diagnosis or ongoing evaluation of certain diseases. The proposed arrangement would help financially needy patients, including Medicare and Medicaid beneficiaries, by fully subsidizing the cost for MRIs of the patient.
The organization assesses a patient’s financial eligibility for a subsidized MRI through the program based on the federal poverty guidelines using a verifiable measure of financial need. Patients are categorized as either “co-pay” or “full pay” patients based on their insurance status and deductible or cost sharing obligations. Co-pay patients are insured patients whose combined deductible balance and cost-sharing obligations are less than the average charge for an MRI that the organization is able to negotiate with contracted MRI providers. A co-pay patient chooses an MRI provider in their insurer’s network and the organization remits payment directly to the MRI provider to cover the patient’s applicable cost-sharing obligation.
Full-pay patients are either uninsured or insured with a combined deductible balance and cost-sharing obligation that exceeds the average charge for an MRI that the organization is able to negotiate with contracted MRI providers. The organization matches the patient with a local contracted MRI provider based on predetermined criteria such as cost, service, and proximity to the patient. The organization certified that assistance is provided without regard to a patient’s choice of provider, insurance plan, and while receiving the organization’s financial assistance, patients are free to change providers or insurance plans.
The proposed assistance program is funded by persons or entities who contribute to the organization’s grant program fund, which includes pharmaceutical manufacturers whose drugs or services may be used by a patient, individuals and foundations. All donations are in the form of cash or cash equivalents. Donors are permitted to either provide unrestricted donations to the organization or to earmark their contributions for the proposed arrangement, but may not earmark their donations by any other criteria such as for patients requiring certain treatments.
The organization also may give donors aggregated data, such as the number of MRIs provided through the proposed arrangement and certain other aggregated data obtained through patient surveys, including data regarding patients’ use of certain disease treatments. The organization does not provide donors with any individual patient information or any information that would enable a donor to correlate the amount or frequency of its donations with the amount of the use of its drugs or its services.
The OIG first concluded that the proposed arrangement presented minimal risk that a donor’s contributions would influence direct or indirect referrals by the organization. The OIG found it important that no donor or affiliate of any donor exerts direct or indirect control over the organization or this program because it operates independently from its donors. The OIG also noted that no donor, or immediate family member, or person otherwise affiliated with a donor currently serves on the organization’s board of directors. The OIG also found it important that although the organization matches full-pay patients with contracted MRI providers for MRIs covered under the arrangement, all patients can choose their health care providers, practitioners, suppliers, and insurance plans, and the organization does not refer to or recommend a donor or a donor’s affiliates.
The OIG also found it important that the organization does not provide donors with any data that would facilitate a donor in correlating the amount or frequency of its donations with the amount of use of its drugs or services. Although some aggregated data may be provided to donors as a courtesy, the proposed arrangement does not provide financial assistance for drugs or any other products or services of any donor. The OIG found it important that the organization permits donors to earmark donations for the proposed arrangement should not significantly raise the risk of abuse. Another aspect noted by the OIG was that no donor or donor affiliate directly or indirectly influences the identification or selection of the diseases selected by the program.
The OIG also concluded that the organization’s provision of financial assistance with cost-sharing obligations of patients, including Federal healthcare program beneficiaries, presented a low risk of fraud and abuse and is not likely to influence any patients’ selection of a particular provider. Although the organization matches full-pay patients with contracted MRI providers, the OIG noted that the organization reimburses contracted providers in full and those MRI costs are not reimbursed by Medicare or Medicaid. The OIG also noted that for co-pay patients, the organization does not refer co-pay patients to or recommend any particular provider.
The organization’s process for determining a patient’s qualification for financial assistance and the fact that the organization does not refer patients to, or recommend or arrange for products or services of a donor were both additional reasons noted by the OIG that the proposed program was not likely to influence patient’s choice of providers.
This advisory opinion is useful to physicians in deciding if a particular patient assistance program or similar arrangement may involve aspects that could raise issues under fraud and abuse laws.