In its recently published Advisory Opinion 15-07, the OIG approved a medical device manufacturer’s (Manufacturer’s) subsidies to Medicare patients in a clinical trial (Study) designed to test the effectiveness of a procedure using the Manufacturer’s specific commercial product.
The OIG’s most recent opinion is significant because it pertains to a product-specific clinical trial sponsored by a commercial company with no government involvement. Previously, in Advisory Opinion 08-11 and Advisory Opinion 04-01 pertaining to the waver of cost-sharing obligations for Medicare beneficiaries participating in government-run clinical trials, the OIG cited as one of the reasons for its favorable conclusions that the clinical trials for which the subsidies would be paid were not “intended to develop, study, or benefit any specific commercial product.” The OIG opined that “commercial or private studies pose significantly different risks under the fraud and abuse authorities,” and therefore, waivers of Medicare cost-sharing obligations may be problematic.
Here, the Manufacturer produces specialized instruments to perform percutaneous image-guided lumbar decompression (PILD). In January of 2014, CMS had issued a National Coverage Determination and supporting Decision Memorandum stating that PILD would be covered by Medicare under the Coverage with Evidence Development (CED) Program when PILD is provided pursuant to a clinical study for Medicare beneficiaries with lumbar spinal stenosis. According to CMS, for an entity to be eligible for Medicare reimbursement under the CED Program, patients must be enrolled in a clinical study that satisfies criteria established by CMS, and the study itself must be approved by CMS.
In this case, the Manufacturer designed the Study with CMS’s consultation and approval. To participate in the Manufacturer’s study and to receive subsidies, study subjects must satisfy the enrollment criteria set forth in the study protocol and execute an informed consent, while physician investigators must comply with the study protocol and are subject to oversight and monitoring by an Institutional Review Board. The Manufacturer proposed to pay both the applicable copayments for all Medicare study participants and all of the costs of the PILD procedure for the study participants in the control group who will not receive a therapeutic treatment (i.e., no PILD).
Although the proposed subsidies implicated both the Anti-Kickback and Civil Money Penalty statutes, the OIG concluded that the proposal presented minimal Anti-Kickback risks based on the following reasons:
- The Manufacturer designed the study with CMS’s consultation and the data published from the study will ultimately assist CMS in assessing if PILD is reasonable and necessary for broader Medicare payment;
- The subsidies would be provided only to the small, predetermined number of study subjects;
- The subsidies are necessary to enable the Manufacturer to conduct a randomized, control study consistent with CMS’s requirement that the study include comparator treatments, such as the sham control arm in the Manufacturer’s study protocol, that allow the Manufacturer to assess the true impact of PILD on patient health outcomes. The OIG determined that the proposed subsidies were reasonable because they would encourage patients to enroll in the study; and the subsidies should be paid to all patient subjects so that patients who receive the sham surgery would not be charged inappropriately and would not become aware they were in the control study if not charged copayments; and
- The proposal did not appear to be designed to induce investigators or other persons or entities to arrange for the use of the Manufacturer’s study-related product except for use in the Study itself. That is because the manufacturer certified that: (1) any compensation paid in connection with the Study would be FMV; and (2) participation in the Study was not directly or indirectly predicated upon, or operate in conjunction with, any other arrangement between the Manufacturer, the physician investigators, the study sites, the study participants, or any other party in a position to refer or arrange for the referral of items or services reimbursable under any federal health care program.
Therefore, although the Study would benefit a specific commercial product, the OIG found the risk of fraud under the Anti-Kickback statute minimal and indicated that it would not impose sanctions under the Civil Monetary Penalties.