OIG Issues Favorable Advisory Opinion for Pharmaceutical Manufacturer’s Refund and Discount Programs for a Treatment Center
The Office of Inspector General for the Department of Health and Human Services (“OIG”) issued a new advisory opinion, Advisory Opinion No. 24-04. Requestor is a pharmaceutical manufacturer that developed a one-time potentially curative therapy for pediatric patients with an ultra-rare immunodeficiency disorder (“Therapy”). Once it is manufactured, the Therapy only has a three-hour shelf-life. As a result, the Therapy can only be administered at one Treatment Center in the country. The OIG issued a favorable opinion for both of the pharmaceutical manufacturer’s two separate financial arrangements for the Treatment Center that are due to the unique nature of the Therapy: (1) the Refund Program and (2) the Discount Program. Under the Refund Program, to address the hesitancy of the Treatment Center to purchase the Therapy, fearing that the Treatment Center will be financially liable for unused Therapy, the pharmaceutical manufacturer will: (i) waive or refund the Treatment Center for the cost of the Therapy if an insurer refuses to reimburse the Treatment Center despite initially approving the Therapy; or (ii) allow the Treatment Center to delay payment for the Therapy in the event of reimbursement delays. Under the Discount Program, the pharmaceutical manufacturer will offer the Treatment Center a discount on the price of the Therapy under certain limited conditions.
IDR Process Extended for Those Affected by Change Healthcare Cyber Attack
In late February, Change Healthcare was impacted by a cybersecurity incident that has affected healthcare organizations’ ability to initiate open negotiation, the initial stage of the Federal independent dispute resolution (“IDR”) process authorized by the No Surprises Act. To address ongoing issues, the Departments of Health and Human Services, Labor, and the Treasury have extended the IDR period for providers, facilities, and air ambulance services “whose ability to timely initiate open negotiation for any item or service furnished on or after Jan. 1, 2024” was affected by the cyberattack, regardless of when the payment or notice of denial was transmitted. Entities may take advantage of the extended period by attesting they were impacted by the cybersecurity incident. The extended period commences on June 14, 2024, and extends until October 12, 2024.
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