In a recent Advisory Opinion No. 23-11 (Advisory Opinion), the Office of Inspector General (OIG) opined that it will not impose administrative sanctions against a clinical trial sponsor covering up to $2,000 of a clinical trial participant’s cost-sharing obligations (i.e., copayments, coinsurance, and deductibles) – even though such subsidization would generate prohibited remuneration under the Federal anti-kickback statute (AKS) and such subsidization would generate prohibited remuneration under the civil monetary penalty provision prohibiting inducements to beneficiaries (Beneficiary Inducements CMP).
While advisory opinions are limited to the specific parties that requested the opinion (and only to the extent that the facts certified by the requester are accurate), this opinion may serve as a useful barometer for how regulators may review similar arrangements in the context of clinical trials.
Fraud & Abuse Concerns
If certain criteria are met, Medicare pays for Category B Investigational Device Exemption (IDE) medical devices, routine care items, and services furnished in a clinical trial involving a Federal Food and Drug Administration (FDA)-approved Category B IDE device, provided that the Centers for Medicare and Medicaid Services (CMS) approves the study. The AKS, however, prohibits any person from “knowingly and willfully” providing any remuneration to induce referrals, or in exchange for referrals, of federal health care program patients or business. Moreover, the Beneficiary Inducements CMP prohibits any person from offering or transferring remuneration to a Medicare beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, item, or service paid by Medicare or a state Medicaid program.
As a CMS-approved Category B IDE device study, the clinical trial sites contemplated in the Advisory Opinion may bill Medicare or a participant’s private insurance as applicable; however, participants must still satisfy their cost-sharing obligations. As such, the clinical trial’s sponsor proposed an arrangement in which it would subsidize the cost-sharing obligations of all study participants (up to $2,000 per participant) so a participant would not incur any cost-sharing expenses relating to their participation in the study (unless such expenses exceed $2,000). The sponsor proposed that it would pay the cost-sharing amount directly to the site or investigator conducting the trial and that the subsidy would not be advertised. The subsidy would be disclosed to the participant in the informed consent form.
While non-routine and non-advertised waivers of cost-sharing obligations (e.g., in the case of financial need) may be permissible, the Advisory Opinion states that subsidizing cost-sharing amounts for clinical trial participants implicates the AKS and the Beneficiary Inducements CMP because it may induce or influence beneficiaries to participate in the study or otherwise receive Medicare-billable items and services. In addition, OIG further provides that such an arrangement neither meets any safe harbor to AKS nor exception to the Beneficiary Inducements CMP.
Enforcement Discretion
Despite the compliance issues raised by the arrangement, OIG opined that it will not impose administrative sanctions on the sponsor requesting the opinion because the proposed subsidy arrangement poses a “sufficiently low” risk of fraud and abuse for the following reasons:
- The arrangement appears to be a reasonable means of promoting clinical trial enrollment and reducing participant drop out, especially participants for which copayments could pose a financial barrier to participation in the study.
- The arrangement poses a low risk of overutilization or inappropriate utilization of items and services paid by a federal health care program. While facilitating clinical trial enrollment and preventing attrition may increase the overall utilization of the investigational device, OIG determined that there is nothing that suggests such an increase would be inappropriate, provided the sponsor includes various guardrails, as discussed below.
- The arrangement is distinguishable from “problematic seeding arrangements” (e.g., arrangements in which manufacturers initially offer subsidies to lock in future use of a reimbursable item or service). In the Advisory Opinion, the subsidy relates only to items and services furnished as part of the clinical trial, and the sponsor’s medical device is intended as a one-time treatment (with some follow-up visits as specified in the protocol). Moreover, the sponsor does not anticipate future use by study participants of any other products manufactured or under development by the sponsor.
Advisory Opinion No. 23-11 Takeaways
While this opinion can only be relied on by the party requesting the opinion and the facts as presented, the opinion helps the industry gauge the OIG’s general thinking on the matter of subsidizing cost-sharing amounts for clinical trial participants.
The opinion illustrates that the OIG has considered and supported realistic opportunities for enrolling socioeconomically diverse sets of participants by helping sponsors remove a potential financial barrier to participation in a clinical trial. This effort is in line with general efforts across federal agencies to increase diversity in clinical trials.
Additionally, the opinion illustrates that OIG has considered the importance of preserving the integrity of a clinical trial. For example, helping to reduce attrition supports the long-term success of the trial and overall integrity of the data. Notably, subsidizing cost-sharing can also help preserve blinding of participants. For example, the sponsor in the opinion did not wish for participants in the control group to be charged a copayment because the participant does not have the potential to receive any therapeutic benefit; however, if a participant is not charged a copayment while others are, it may alert the participant that they are in the control group.
Guardrails
The opinion also provides the industry with several guardrails that may be employed by the sponsor to help mitigate the risk of fraud and abuse. These guardrails may prove informative when designing future cost-sharing subsidies. Such guardrails include:
- The availability of cost-sharing subsidies is not advertised.
- Individuals must satisfy the enrollment criteria and execute an informed consent document to be eligible to participate in the study.
- Investigators and sites must comply with the study protocol and are subject to oversight and monitoring by an institutional review board.
- Study enrollment is capped at 1,500 participants.
- CMS evaluated and approved the study as a “Category B IDE study” and determined that it meets certain criteria to ensure appropriate patient protections and design.
While there remains an irreducible risk that a regulator may review any given arrangement differently, these guardrails illustrate key facts a regulator may consider when determining whether an arrangement poses a high risk of fraud and abuse.
Foley is here to help you address the short- and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Foley relationship partner, our Health Care & Life Sector, or to our Health Care Practice Group with any questions.
