On March 24, 2023, the Workplace of Inspector Normal (“OIG”) issued (the “Opinion”), during which it determined to not impose sanctions on an Association to offer pay as you go present playing cards to sufferers for sure preventative screening exams (the “Association”).

As a part of the Association, a laboratory and its mother or father firm (the “Corporations”) would offer a pay as you go card, resembling a Visa or Mastercard present card, of as much as $75 to sure people to encourage these people to return the pattern assortment package related to an FDA-approved colorectal most cancers screening check (the “Check”). Within the Opinion, the OIG decided that it will not impose administrative sanctions below the Anti-Kickback Statute (“AKS”) or the Beneficiary Inducements prohibition within the Civil Financial Penalties Regulation (“CMP”) for the Association.

FOCUS ON THE FACTS: Assessment of Particular Safeguards Beneath the Association

In its evaluation, as at all times, the OIG relied closely on the precise info of the Association. Particularly, the OIG famous that the Check should be prescribed by a well being care supplier performing throughout the scope of their prescribing authority (the “Prescriber”). The Check package is then mailed to the affected person’s house. The affected person should accumulate their very own stool pattern and ship the Check package again to the laboratory. As such, the Prescriber doesn’t management whether or not the Check package pattern is distributed to the laboratory – that step is throughout the affected person’s management.

Subsequent, the Corporations licensed they might implement sure safeguards associated to the Association, together with the next:

• The Reward Card can be mailed solely to these sufferers who return the Check package by a specified deadline.
• They’d advise sufferers that the Reward Card will not be used for gadgets or providers offered by the Corporations.
• Every affected person can be restricted to receiving one Reward Card per 36-month interval, a time interval that aligns with Medicare’s protection for the Check, which is as soon as each 36 months.
• The Corporations would implement processes to make sure that the recipient of the Reward Card had not already acquired a Reward Card within the prior 36-month interval.
• The Corporations wouldn’t have interaction in another patient-focused promotion of the Association, resembling direct-to-consumer ads on third-party web sites or ads in newspapers, on tv or radio, or in magazines in reference to the Association.
• The Corporations wouldn’t promote or market the Association to Prescribers or provide or pay any remuneration to Prescribers in reference to the Association.

THE OIG’S ANALYSIS:

The OIG suggested that the Association would implicate the Beneficiary Inducements CMP and AKS due to the provide and switch of remuneration to Medicare sufferers, doubtlessly ensuing within the buy of laboratory providers in reference to the Check. Nevertheless, the OIG concluded that it will not impose administrative sanctions on the Corporations in reference to the Association below both legislation based mostly on the fact-specific evaluation outlined beneath.

Assessment of the Proposed Association Beneath Federal AKS

At a excessive stage, the OIG concluded that the Association presents a minimal danger of fraud and abuse below the AKS. Notably, the OIG cited to its prior opinion on preventative care providers, noting that:

“From an anti-kickback perspective, the chief concern is whether or not an association to induce sufferers to acquire preventive care providers is meant to induce different enterprise payable by a Federal well being care program. Related components in making this analysis would come with, however not be restricted to: the character and scope of the preventive care providers; whether or not the preventive care providers are tied straight or not directly to the availability of different gadgets or providers and, in that case, the character and scope of the opposite providers; the premise on which sufferers are chosen to obtain the free or discounted providers; and whether or not the affected person is ready to afford the providers.”

Accordingly, the OIG decided that the Association is unlikely to result in improperly elevated prices or overutilization as a result of the Check prescription is restricted in a number of methods. For instance, the Check is restricted to sufferers aged 45-75-years-old and every affected person might solely receive one prescription each 36-months. Moreover, as a result of Reward Playing cards are solely offered to sufferers who return the Check, slightly than to all sufferers who obtain a Check, Prescribers will be unable to anticipate whether or not the Corporations would provide or present the Reward Card to sufferers for which the check was ordered.

Second, the Association would profit sufferers and the Medicare program by selling compliance with a really helpful screening check. Notably, over thirty % of sufferers who acquired a Check weren’t returning their pattern. Lastly, the OIG famous that the listed safeguards set forth by the Corporations cut back the chance of fraud and abuse.

Beneficiary Inducements CMP and the Preventative Care Exception

When analyzing the Beneficiary Inducements CMP, the OIG centered on the exception to the definition of “remuneration” below part 1128A(i)(6)(D) of the Social Safety Act, excluding incentives given to people to advertise the supply of preventive care the place the supply of such providers are usually not tied (straight or not directly) to the availability of different providers reimbursed in entire or partly by Medicare or an relevant State well being care program. (the “Preventive Care Exception”).

The OIG opined that the Reward Card below the Association would fulfill this exception as a result of the Reward Card promoted the supply of a preventative screening check and the Reward Card would neither be an instrument convertible to money, nor, on this specific case, disproportionately massive in relationship to the worth of the preventive care service. Whereas the OIG made a word that $75 could also be too massive in different contexts, it thought of the advantages to beneficiaries and the longer term well being care prices anticipated to be averted because of the Checks when evaluating the proportionality on this occasion.

FINAL THOUGHTS:

Reward playing cards and different various types of remuneration stay on the OIG’s radar and topic to scrutiny. Notably, the OIG not too long ago revealed an discussing the way it differentiates between “money,” “money equivalents,” and “in-kind” present playing cards.

Whereas the Opinion gives some flexibility, you will need to word that the OIG highlighted that its opinion is, as at all times, particular to the info offered within the Corporations’ Association right here. Notably, the OIG said:

“We admire that the Reward Card might current the chance for sufferers to obtain invaluable remuneration that might induce them to buy federally reimbursable providers and warning that if any of the foregoing info have been completely different, we seemingly would attain a special conclusion with respect to the chance offered by this sort of association below the Federal anti-kickback statute, no matter whether or not the association satisfies an exception to the Beneficiary Inducement CMP.”

Accordingly, comparable preparations should be fastidiously reviewed to make sure compliance with relevant legislation. If in case you have additional questions associated to this submit, attain out to a member of Sheppard Mullin’s .

FOOTNOTES

42 U.S.C. § 1320a–7b(b).

42 U.S.C. § 1320a–7a(a)(5).