The Department of Health and Human Services (HHS) and Office of Inspector General (OIG) issued Advisory Opinion 15-11 stating that the OIG will not impose sanctions on individuals for a program that provides free drugs to patients experiencing late insurance approvals. The OIG concluded that, although the arrangement has the potential to generate improper payment under the federal health care program anti-kickback statute, the OIG would not seek administrative sanctions against the manufacturers because the “Program” presents a low risk of fraud and abuse. The OIG also concluded that the arrangement would not violate the beneficiary inducement civil monetary penalty (CMP), which prohibits the offer of payment to a Medicaid or Medicare beneficiary that the offeror knows or should know is likely to influence the beneficiary to use a particular “provider, practitioner, or supplier” for federally reimbursed items or services.

For more information on this Program and the potential implications for drug manufacturers, read the Client Alert  written by Joseph Metro and Jacquelyn Godin.