The U.S. Department of Health & Human Services, Office of Inspector General (OIG) recently issued an advisory opinion regarding a proposed arrangement by a specialty pharmacy (Requestor) to pay local pharmacies a per-fill fee for the provision of support services in connection with patient referrals to the specialty pharmacy. OIG found that this per-fill fee potentially could generate prohibited remuneration and that OIG potentially could impose administrative sanctions on the Requestor under the anti-kickback statute (AKS). As with all advisory opinions, a definitive conclusion regarding whether there is an AKS violation requires a determination of the intent of the parties, which is beyond the scope of the advisory opinion process.
The Requestor is a specialty pharmacy that dispenses specialty drugs used to treat various chronic and life-threatening diseases. According to the Requestor, these specialty drugs may be unavailable at local pharmacies. Under the proposed arrangement reviewed by OIG, the Requestor would enter into agreements with local pharmacies and pharmacy networks to provide specialty drugs to patients, which may be reimbursable under federal healthcare programs. In addition, under the proposed arrangement, the local pharmacies and pharmacy networks would receive a per-fill fee amount in exchange for providing various support services. Such support services would include: (1) accepting the prescription from the patient or prescriber; (2) gathering patient and prescriber demographic information; (3) recording patient-specific medication history and use, including drug names, strength and directions; (4) patient counseling; (5) informing the patients about access to specialty drugs, including the availability from pharmacies other than the Requestor’s pharmacy; (6) obtaining patient consent to forward the prescription to the Requestor; (7) transferring prescription information to the Requestor; and (8) providing ongoing patient assessments for subsequent refills. It is worth noting that the Requestor certified that the per-fill fee, which would be paid upon the receipt of the initial prescription and each subsequent refill, would be fair market value for the support services.
While the Requestor certified that the per-fill fee would be fair market value for the support services, the fee would be paid upon the receipt of the initial prescription by the Requestor, leading OIG to find that the proposed arrangement implicated the AKS. OIG also concluded that, due to the fact that the Requestor would only pay the per-fill fee for support services if the services resulted in a referral to the Requestor, the fee would be “directly linked” to the business generated by the local pharmacy for the Requestor. According to OIG, this direct link between the payment of the fee and generation of business for the Requestor has the potential to materially influence the local pharmacies’ decisions, leading to more than a minimal risk of fraud and abuse. While OIG acknowledged that the support services could benefit patients in terms of care and coordination, OIG also acknowledged that the AKS is implicated if one purpose of the remuneration is to generate referrals. Consequently, OIG expressed concern that, under this proposed arrangement, there was “significant” risk that the fee would be considered compensation for referrals, rather than for bona fide commercially reasonable services, by the local pharmacies.
It is important for pharmacies to remember that, while a financial compensation arrangement with another pharmacy will not necessarily run afoul of the AKS, pharmacies should be cautious when such an arrangement involves the potential for patient referrals and per-patient or “per-click” arrangements. In addition, pharmacies should note that compensation between parties should be certified as fair market value. Further, the arrangement should be structured to ensure that remuneration is not being provided by one party to the other based on the volume or value of referrals of items or services reimbursable by a federal healthcare program such as Medicare or Medicaid. Finally, pharmacies should remember that OIG is continuing to focus on pharmacies and pharmaceutical reimbursement. This advisory opinion is one more example of the type of arrangements that provide possible problems for pharmacies.