The Office of Inspector General (OIG) rescinded Advisory Opinion 06-04 (Opinion 06-04) on November 28, 2017, retroactive to its original issuance date of April 20, 2006. Opinion 06-04 had been modified by the OIG on December 23, 2015. Issued to a nonprofit, tax-exempt, charitable patient assistance program that provides aid to individuals and families for treatment of specific chronic diseases (Requestor), the OIG initially affirmed in Opinion 06-04 that Requestor’s enumerated business arrangements would not be subject to federal anti-kickback statute (AKS) liability or administrative sanctions under section 1128A(a)(5) of the Social Security Act (SSA).

The OIG made the decision to rescind Opinion 06-04 because Requestor failed to fully, complete and accurately disclose all relevant and material facts to the OIG and failed to comply with certain factual certifications it made to the OIG, which were material to the OIG’s conclusion that the arrangement did not implicate the SSA or AKS. Specifically, the Requestor: (i) provided patient-specific data to donors that could enable those donors to correlate the amount and frequency of their donations with the number of subsidized prescriptions or orders for their products; and (ii) allowed donors to directly or indirectly influence the identification or delineation of Requestor’s disease categories.

The OIG argued that these certifications were material to its determination in Opinion 06-04 that the arrangement represented an independent, bona fide charitable organization between donors and patients. The OIG further stated that because Requestor failed to comply with these certifications, it “materially increased the risk that Requestor served as a conduit for financial assistance from a pharmaceutical manufacturer donor to a patient,” thus potentially increasing harm to federal health care programs.

The OIG explained that an advisory opinion has “no force or effect” when a party misrepresents materials facts relied upon by the OIG in issuing such opinion. Further, the OIG felt a rescission was required based on the Requestor’s conduct and other specific facts and circumstances to maintain the integrity of the advisory opinion process. The OIG made it clear that the OIG, Department of Justice and other relevant government agencies retain their full investigational and prosecutorial authority in this matter, and enforcement action for potential violations of the AKS may apply.

Posted by Robert A. Paster