The Anti-Kickback Statute (AKS) is a federal law enacted by lawmakers to help reduce the risk that medical professionals would use financial motivation to guide medical decisions. This intent is good, but the application can go awry. One example involves the use of financial payment assistance programs (PAPs) to help pay for expensive medications.
The idea of PAPs seems noble. It seems like a great idea to help those who cannot afford their medications to get financial assistance. But problems can arise depending on how these PAPs actually work.
In a recent case, pharmaceutical giant Pfizer is pushing back on whether or not PAP use should constitute an AKS violation in certain situations.
Is the use of PAPs a violation of the AKS?
The United States Department of Health and Human Services (HHS) Office of the Inspector General (OIG) released a Bulletin in 2005 that states PAPs are allowed as long as the assistance does not “run afoul of the AKS or other laws.” It goes on to clearly state that certain drug manufacturer PAPs run afoul of the AKS and are, therefore, not allowed.
More specifically, the OIG explains that programs that involve drug companies offering PAP subsidies tied to use of their product presents risk of kickbacks. The OIG has provided additional publications to provide further information, such as another Bulletin released in 2014 that clarifies how this process works with independent charities.
In the case noted above, Pfizer tried to argue that their process for providing PAPs for use of their own medications did not impact the medical professional’s decision because the PAP was not available until after the doctor had already decided to use the medication. The courts did not agree, and so allowed the case to move forward. We will provide any pertinent updates as they become available as the case progresses.
What should my health care organization learn from this post?
The overarching lesson: these programs are complicated, and compliance is tricky. This is particularly true since the government continually provides guidance that can make impact the application of the law.
As such, it is generally wise to conduct regular internal audits to better ensure compliance in light of applicable Bulletins or other forms of communication that may have changed the rules.
Attorney John Rivas is responsible for this communication.