Summary of OIG Advisory Opinion 09-07 

On June 23, 2009, the Department of Health and Human Services, Office of Inspector General (OIG) issued Advisory Opinion No. 09-07, which involved a proposal to expand an existing program that provides free oral nutritional supplements (Supplements) to end-stage renal disease patients who are on dialysis (Proposed Arrangement). In its Opinion, the OIG concluded that (i) the Proposed Arrangement would not result in the imposition of civil monetary penalties under Section 1128A(a)(7) of the Social Security Act (42 USC 1320a-7(a)), and (ii) the OIG would not impose administrative sanctions under the federal anti-kickback statute (Social Security Act Section 1128B(b); 42 USC 1320a-7(b)).

Under the Proposed Arrangement, an operator of dialysis facilities (Requestor) would expand its existing program to provide eligible patients with up to 156 doses of Supplements per year. Patients would be eligible only if the patient was in the Requestor's dialysis program and had a serum albumin level less than or at a target level set by the Requestor. The target level would be set using independently established National Kidney Foundation (NKF) Kidney Disease Outcomes Quality Initiative guidelines. The Requestor would only provide the Supplements when the patient's attending physician determines it's medically necessary for the patient. The Requestor would deliver Supplements to patients when they visited Requestor's dialysis facility for treatment; patients would consume the Supplements on the premises. Patients would cease to be eligible to receive Supplements when their albumin serum levels reached clinical outcome goals established by the NKF. In addition, the Requestor would not advertise or promote the Supplement program to patients and would not claim the costs of the Supplements on federal program costs reports or shift them to other federal healthcare programs.

In its analysis, the OIG expressed concern that dialysis facilities might induce beneficiaries to obtain federal program items and services by offering Supplements when they are not clinically indicated. The OIG reiterated its longstanding concerns under the CMP and anti-kickback laws with giveaways to beneficiaries, stating that they can (i) corrupt clinical decision-making, (ii) harm competing providers and suppliers who do not offer incentives, and (iii) negatively affect the quality of care given to beneficiaries. Despite these concerns, the OIG declined to impose civil monetary penalties and administrative sanctions because the Proposed Arrangement included the following safeguards:

1. The Requestor would provide the Supplements only to patients meeting eligibility criteria and whose physician determined a medical need for the Supplements;
   
   
2. Patients typically disliked the Supplements because they are not palatable; and
   
   
3. The Proposed Arrangement encourages compliance with physician recommendations.

In addition to these three main safeguards, the OIG cited favorably that:

1. The Supplements must be consumed at the facility, which maximizes the likelihood that the patients will consume them and minimizes the likelihood that patients may divert them to family members or others;
   
   
2. The Supplement program would not be advertised to beneficiaries;
   
   
3. The per-patient aggregate market value of the Supplements would be capped at a pre-set number of doses annually;
   
   
4. The Supplements are not generally reimbursable by federal healthcare programs, and therefore present a limited risk of increased federal program costs; and
   
   
5. Due to the above factors, the Proposed Arrangement presents minimal risk of influencing patient choice of dialysis facility.

The OIG also expressly clarified that its favorable opinion was premised on patients meeting objective clinical criteria for malnutrition and that the Supplements are clinically indicated for the targeted patients. Overall, the OIG concluded that the numerous safeguards in the Proposed Arrangement are consistent with its stated purpose to improve the nutritional status of patients that suffer malnutrition, and will reduce their risk of hospitalization, infection, and mortality.

*The Fraud and Abuse Practice Group Leadership would like to thank Advisory Opinions Task Force members Claire Turcotte, Esquire (Bricker & Eckler LLP, Cincinnati-Dayton, OH) and Julie Kass, Esquire (OBER|KALER, Baltimore, MD) for writing and reviewing this summary, respectively.