Life Sciences

OIG: Proposed PAP carries little fraud risk

Pharma Compliance Alert, April 18, 2007

A pharmaceutical company's proposed patient assistance program (PAP) will have little potential for fraud and abuse under the Part D program because there are sufficient safeguards to ensure that it will operate entirely outside of the program, the OIG said in an advisory opinion earlier this month. The program could potentially cause anti-kickback stature violations if "if the requisite intent to induce or reward referrals of federal health care program business were present." However, the OIG would not impose administrative sanctions against the company in connection with the program, it said.

Under the proposed program, the company would expand its existing PAPs to include financially-needy Medicare beneficiaries who are enrolled in a Part D plan. The PAPs will ensure they operate outside the benefit by:

  • Notifying enrollees' Part D plans that the free drugs are being provided outside the Part D benefit

  • Determining Part D enrollees' eligibility for assistance based only on financial need by using a methodology that's separate from the choice of plan, the benefit design, or where an enrollee is on the plan's benefit spectrum

    Read the advisory opinion on the OIG Web site.

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