OIG adds to increased scrutiny of how patients pay for rising share of drug costs

May 27th, 2014 - Scott Kraft   
Categories:   Compliance   Insurance   Office of Inspector General (OIG)  

Charity programs that help patients pay for the rising cost-sharing obligations of needed drugs may run afoul of anti-kickback rules when the charity’s scope is so narrow that it guides the patient toward specific drugs for treatment or providers, the HHS Office of Inspector General said last week.

The OIG’s Supplemental Special Advisory Bulletin for Independent Charity Assistance Programs makes clear that the OIG still believes that properly structured patient assistance programs (PAPs) can help patients to afford costly new drug treatments.

The key is that financial contributions made to these charity programs by drug manufacturers and others are made to bona fide charitable programs, including those that operate independently and that the scope of the charity’s efforts around a particular disease or disease treatments are not so narrow that the funds end up being directly primarily to specific drugs.

This could include, according to the OIG, directing patients to specific providers under the belief that the patients would be given specific drugs.

Put plainly, what the OIG wants to avoid is pharmaceutical companies funneling money through charity organizations in a way that ensures most or all of the charitable funds are directed toward the patient’s share of a drug treatment, while the federal government continues to pay for its portion of the drug.

The biggest implication for the physician’s office is an indirect one – those who prescribe the same company’s drug and, as a result, have additional patients referred by a charity supported by that drug’s manufacturer, may get swept up in the added scrutiny of the OIG. Though, to be clear, the OIG’s primary target is the donor.

Private payers also trying to crack down
The strictness of the anti-kickback laws have helped to shield Medicare and Medicaid from the increasing efforts of drug manufacturers to increase use of costly drugs by heavily subsidizing the patient’s cost.

The typical method is a prescription discount card issued to the patient to use to defray the cost of the copay. The card is sometimes issued by the prescribing provider, or obtained through the drug company’s web site or other marketing effort.

A card could offer the patient, for example, a discounted copay of $20 for a drug that the insurance company has in the most expensive tier of its formulary. Hypothetically, a drug might cost $700 a month, with the patient expected to pay $70 of that cost. The drug company discounts the patient’s copay to $20, but the insurance company continues to pay its full share.

As the insurance companies increasingly see it, these efforts thwart the whole purpose of the tiered formulary, which is to incentivize the patient to seek lower cost treatment opportunities.

UnitedHealthcare backed away from an effort earlier this year to outright disallow the use of copay reduction cards or coupons for its insured patients, amid complaints from providers and pharmacies that the ban would be very difficult to enforce. Not to mention patient pressures.

Don’t expect insurance companies to give up, which may ultimately change the way patients seek drugs for treatment and the way providers prescribe. Drug companies are already pushing patients to move toward prescription delivery by mail, in some cases offering the patient a better deal, such as access to a 90-day supply at a lower cost or automated refill delivery.

As drug vendors continue to create and push more expensive drugs, expect this struggle to continue, as CMS and private insurers alike face enormous pressure to cover any drug approved by the FDA for therapeutic benefit to patients.

###

Questions, comments?

If you have questions or comments about this article please contact us.  Comments that provide additional related information may be added here by our Editors.


Latest articles:  (any category)

Compliance Billing: Power Mobility Devices
December 27th, 2022 - Chris Woolstenhulme
In May of 2022, the OIG conducted a nationwide audit of Power Mobility Device (PMD) repairs for Medicare beneficiaries. The findings were not favorable; the audit revealed CMS paid 20% of durable medical suppliers incorrectly during the audit period of October 01, 2018- September 30, 2019. This was a total of $8 million in device repairs out of $40 million paid by CMS. We gathered information in this article to assist providers and suppliers in keeping the payments received, protecting beneficiaries, and assisting you in ensuring compliance.
Leveraging Hierarchical Condition Category (HCC) Coding to Improve Overall Healthcare
December 27th, 2022 - Kem Tolliver
Diagnosis code usage is a major component of optimizing HCCs to improve overall healthcare. Readers will gain insight into how accurate diagnosis code usage and selection impacts reimbursement and overall healthcare.
Accurately Reporting Diabetic Medication Use in 2023
December 20th, 2022 - Aimee Wilcox
Along with the ICD-10-CM coding updates, effective as of October 1st, the guidelines were also updated to provide additional information on reporting diabetic medications in both the general diabetic population and pregnant diabetics. Accurate reporting is vital to ensure not only maximum funding for risk adjusted health plans, but also to ensure medical necessity for the services provided to this patient population.
REMINDER: CMS Discontinuing the use of CMNs and DIFs- Eff Jan 2023 Claims will be DENIED!
December 19th, 2022 - Chris Woolstenhulme
Updated Article - REMINDER! This is important news for durable medical suppliers! Effective January 1, 2023, CMS is discontinuing the use of Certificates of Medical Necessity (CMNs) and DME information forms (DIFs). We knew this was coming as the MLN sent out an article on May 23, 2022, but it is time to make sure your staff knows about these changes.
How Automation Could Impact the Future of Medical Coding
December 15th, 2022 - Find-A-Code
Automation is a fact of life in the modern world. As digital systems expand and mature, the creators of those systems are bringing more automation to more industries. Medical coding isn't the exception.
CPT Codes and Medicare's Relative Value Unit
December 13th, 2022 - Find-A-Code
A recently published study looking to explain income differences between male and female plastic surgeons suggests that billing and coding practices may be part of the equation. The study focused primarily on Medicare's relative value units (RVU) as applied to surgeon pay. But what exactly is an RVU?
Identifying the MEAT to Support Reporting Chronic Conditions in the Computer-Assisted-Coding (CAC) World
December 13th, 2022 - Aimee Wilcox
The benefits of computer-assisted-coding (CAC) are great and understanding how to engage with the engine to ensure maximum coding efficiency is vital to the program's success for your organization. But how do you know when to accept an autosuggested code and when to ignore it, especially when it has to do with historical patient data?



Home About Contact Terms Privacy

innoviHealth® - 62 E 300 North, Spanish Fork, UT 84660 - Phone 801-770-4203 (9-5 Mountain)

Copyright © 2000-2023 innoviHealth Systems®, Inc. - CPT® copyright American Medical Association