OIG Oks Device Maker’s Proposal to Cover Medicare Cost-Sharing for Clinical Trial Participants
- January 12, 2024
A proposed arrangement for a medical device manufacturer to pay Medicare cost-sharing obligations in the context of a clinical trial would not result in sanctions, the Department of Health and Human Services Office of Inspector General (OIG) said in an advisory opinion posted December 27, 2023.
The opinion requestor manufactures the “System,” a medical device-based therapy that is designed to modulate the strength of cardiac muscle contraction in patients experiencing heart failure.
The device is approved by the Food and Drug Administration for use in heart failure patients who meet certain criteria. Requestor is also the sponsor of a clinical trial designed to determine the safety and efficacy of the System in a different population of heart failure patients.
The Centers for Medicare & Medicaid Services approved the study as a Category B IDE study where Medicare pays for the device and routine care items and services furnished in the study.
Under the proposed arrangement, requestor would pay cost-sharing obligations for Medicare beneficiaries participating in the study, up to a maximum of $2,000 per study participant.
According to requestor, the arrangement would reduce financial barriers to enrollment and prevent attrition from the study due to financial reasons; facilitate socioeconomic diversity of the study population; and preserve blinding of participants.
OIG noted that the proposed arrangement would implicate the Anti-Kickback Statute (AKS) because the subsidies could induce Medicare beneficiaries to participate in the study, during which they would receive health care items and services that are reimbursable by a federal health care program. In addition, requestor also would provide remuneration to the investigators and sites participating in the study in two forms: the opportunity to bill federal health care programs for items and services related to the study; and a guaranteed payment of beneficiary cost sharing which, in some circumstances, an investigator or site may not be able to collect in full.
Nevertheless, OIG said the risk of fraud and abuse presented by the proposed arrangement is sufficiently low under the AKS and, in an exercise of discretion, would not impose sanctions under the Beneficiary Inducements CMP.
According to OIG, the proposed arrangement “appears to be a reasonable means of promoting enrollment in the Study.”
In addition, the arrangement would pose a low risk of overutilization or inappropriate utilization of items and services payable by a federal health care program. “Because the cost-sharing subsidies are specifically designed to facilitate enrollment of individuals in the Study and help prevent attrition during the course of the Study, it is possible that overall utilization of items and services may increase, but there is nothing to suggest that such an increase would be inappropriate,” the opinion said.
OIG also distinguished the proposed arrangement from problematic seeding arrangements—where manufacturers initially offer subsidies to lock in future utilization of a reimbursable item or service. Here, requestor would provide cost-sharing subsidies relating only to items and services furnished as part of the study, and the System itself is intended as a one-time treatment.
Advisory Opinion No. 23-11 (Dep’t of Health and Human Servs. Office of Inspector Gen. Dec. 21, 2023).