The Health and Human Services Office of Inspector General (OIG) recently issued Advisory Opinion No. 18-03 (the “Opinion”) on a question regarding the possible application of the Anti-Kickback Statute in a proposed arrangement between a federally qualified health center look-alike (the “Provider”) and a county clinic (the “Clinic”). In the arrangement, the Provider would give, free of cost, certain items of computer hardware and software, along with camera equipment, to the Clinic for use in telemedicine encounters with Clinic patients seeking services related to HIV prevention, specifically consultations regarding the prescription of medications for pre-exposure prophylaxis (“PrEP”) and post-exposure prophylaxis (“PEP”). Under the proposal, the Provider would also install, maintain, and update the equipment as necessary to maintain telemedicine services for Clinic patients. The request for opinion arose from concerns that the arrangement would implicate the Anti-Kickback Statute for both the Provider and the Clinic. The OIG concluded that while the proposed arrangement could potentially generate prohibited remuneration under the Anti-Kickback statute, it would not impose administrative sanctions since the arrangement presented a low risk for fraud for several reasons, as follows:

  1. The proposed agreement included safeguards that OIG found sufficient to prevent inappropriate client steering, including (a) the Clinic was free to refer patients to other qualified PrEP and PEP consultants other than the Provider; (b) the Clinic would advise all patients who wish to receive PrEP or PEP consultations that they could receive them either virtually or in-person from the Provider or another qualified provider, or in-person from the Provider or another qualified provider; and (c) nothing inherent in the telemedicine hardware or software would limit or restrict their use in communicating with PrEP and PEP telemedicine providers other than the Provider.
  2. The proposed arrangement was equally unlikely to result in inappropriate patient steering to the Provider’s pharmacy since the pharmacy was over 80 miles away from the Clinic and did not offer mailer-order services. In addition, neither the Provider nor the Clinic would recommend specific pharmacies for the filling of prescriptions for PrEP or PEP medications.
  3. The proposed arrangement was deemed unlikely to impose increased costs on federal health care programs since the Clinic would have referred clinically appropriate patients for consultation and follow-up with outside providers regardless of the proposed agreement. In addition, overutilization of PrEP and PEP treatments are unlikely given the limited clinical circumstances in which such are prescribed or sought.
  4. The promotion of public health and HIV awareness and prevention weighs in favor of making PrEP and PEP consultations and treatment accessible for those in rural or medically underserved areas. The proposed agreement might benefit both the Provider and the Clinic, but the primary beneficiaries would be Clinic patients who could receive HIV prevention services conveniently using telemedicine equipment and software.

While the Opinion discussed here is limited to the Provider and Clinic that requested it, it may provide some insight into the analytical process of the OIG regarding other instances of comparable arrangements in which telemedicine hardware, software, camera equipment and ongoing service and maintenance are provided free of charge to similarly-situated clinics, particularly those engaged in the provision of health care to high-risk populations in medically underserved or rural areas.

The FisherBroyles Pharmacy and Health Care Law team is pleased to keep you updated on events of interest to those in the healthcare and pharmaceutical industries. Questions may be directed to any of the following attorneys:

Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson
brian.dickerson@fisherbroyles.com
202.570.0248

Anthony Calamunci, FisherBroyles Partner
Anthony Calamunci
Anthony.calaunci@fisherbroyles.com
419.376.1776

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid
nicole.waid@fisherbroyles.com
202.906.9572

Amy Butler, FisherBroyles Partner
Amy Butler
amy.butler@fisherbroyles.com
419.340.8466