OIG ALLOWS MANUFACTURER PAPS TO FURNISH DRUGS TO FREE CLINIC

From the law firm of Vinson Elkins (V&E Health Mailings [healthmailings@velaw.com]):

In Advisory Opinion 06-08, the Department of Health and Human Services Office of Inspector General (OIG) reviewed whether a free clinic that is not enrolled as a Medicare provider and thus does not receive Medicare reimbursement, could dispense drugs to Medicare beneficiaries at no charge, even if the drugs are reimbursable under Medicare Part D. The clinic receives these drugs through various pharmaceutical manufacturer pharmaceutical assistance plans (PAPs). In determining that the relationship between the clinic and the PAPs did not pose any Anti-Kickback Statute risk, the OIG found it key that: (a) the clinic receives no remuneration from the PAPs; and (b) the clinic is not in a position to generate business for the PAPs reimbursable under Medicare and Medicaid. The OIG also concluded that there is no improper inducement to Medicare and Medicaid beneficiaries to use the services of the clinic in the form of free drugs because the clinic does not do any billing. Reporter, Andrew Ruskin, Washington, 202.639.6525 or aruskin@velaw.com.