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AHLA's Speaking of Health Law
Fraud and Abuse: Agency Interactions—Advisory Opinions
In this episode of AHLA's monthly series on fraud and abuse issues, Matthew Wetzel, Associate General Counsel, Compliance Officer, GRAIL, speaks to Kristin Carter, Baker Donelson Bearman Caldwell & Berkowitz PC, and Laura Morgan, Dorsey & Whitney LLP, about the CMS and OIG Advisory Opinion process, including the history of the process, how to request guidance from CMS and OIG, and what to expect from the process. They also discuss CMS’ changes to the Stark Advisory Opinion process as part of the regulatory sprint to coordinated care and other recent impacts on the Advisory Opinion process. From AHLA's Fraud and Abuse Practice Group. Sponsored by BRG.
Listen to the June 2021 episode, which discusses the Self Disclosure process.
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Speaker 2:Welcome to the American Health Law Associations Monthly Fraud Abuse podcast. I'm your host, Matt Wetzel, and today is April 13th, 2021. Today's episode is the first in a two-part series we're launching on agency interactions. This month we're talking about advisory opinions, how to request guidance from CMS and from the Office of Inspector General hhs, what to expect with the process and what will they address. In a later episode, we'll dive into self disclosures and their benefits and risks. Joining us today to talk about advisory opinions are Kristen Carter, a partner with the law firm of Baker Donaldson, and Laura Morgan, a partner with Dorsey and Whitney in Minneapolis. Kristin. Laura, welcome back to the podcast.
Speaker 3:Thanks for having us, Matt.
Speaker 2:Absolutely, absolutely. Well, we're gonna try to tackle this podcast in a somewhat orderly fashion. Uh, we did a planning, uh, meeting last week, and I know there's a lot of, uh, excitement about the topic of advisory opinions, especially among re regulatory lawyers. So, Kristen, uh, you're gonna focus on the OIG and the anti kickback statute, the beneficiary inducement CMP process. And Laura, you'll focus on CMS and its stark advisory process. So is that a, that's a deal.
Speaker 3:Sounds great. Sounds good.
Speaker 2:All right. Well, um, you know, maybe we'll start, uh, uh, uh, in, in recent times, uh, Laura, you're actually the impetus for this podcast. We had, uh, uh, shared some messages earlier this year about recent changes to the Stark advisory process that really kind of piqued your interest, and I wonder if you might share those with our listeners before we dive into, uh, some of the, uh, nuts and bolts of the advisory, uh, opinion process at CMS and at oig.
Speaker 3:Sure thing. Yes, they're, uh, the Stark and, uh, ooi c m s, no, I g regulatory changes have, have been, uh, quite a lot for US regulatory lawyers to, to process lately. Um, and in the midst of the flurry of regulatory changes as part of the regulatory sprint coordinated care, um, c m s also finalized some CH regulatory changes to the Stark advisory opinion regulations, which were finalized, um, effective as of January 1st, 2020. And this came about, um, as, actually as part of the regulatory sprint to coordinated care, there was a request for information that CMS issued in June, 2018, um, uh, that CMS sent out to, uh, address ways that CMS could modify the sarlo to reduce barriers to patient care coordination value-based arrangements. Um, and didn't specifically solicit comments regarding the Stark advisory opinion process in that rfi, but they received a number of comments about ways that the advisory opinion process could be improved. And so they decided to take a fresh review of the advisory opinion process in light of those comments to identify a limitations and restrictions that may be unnecessarily serving as an obstacle to a more robust advisor opinion process. Um, and CMS acknowledged in, uh, preamble to its changes to advisor opinion regulations, that a faster and more robust advisor opinion process facilitates a shift to value-based care for providing more guidance for parties, trying to understand how the Stark Law applies in an evolving and innovative marketplace. Um, and some of the notable changes, I'll, I'll get into more during our discussion today, um, but they seem as expanded the parties that can, um, rely on advisory opinions and updated some of the time timeframes under which opinions must, must be issued. Um, and there have been very few stark advisor opinions issued historically, particularly in comparison to how many opinions OIG has issued historically. Um, so we're hopeful that, um, this process will, um, will indeed, um, make the advisor opinion process more meaningful and accessible to the regulated industry.
Speaker 2:Well, thanks for that update, uh, uh, Laura, and, uh, you know, as you said, as a, as a regulatory lawyer, it's interesting how the process works at the agency. And, you know, I, I do wanna dig a little bit into sort of a history of the advisory opinion process. I wanna dig into, um, the agency's authority in this area. But, you know, maybe just at a high level, uh, and Christian, let's start with you on the OIG and the kickback side. Um, when and why would someone go to OIG for an advisory opinion?
Speaker 4:Sure. So, you know, with respect to the OIG advisory opinion process, this is, uh, a pretty mature program that's been around since 1996. And just to sort of give some history here, um, this is part of the Health Insurance Portability and Accountability Act of 1996, um, and Congress and the O I D recognized that the anti-kickback statute, which is a criminal statute, is very on its face, very broad, and the penalties are significant, um, you know, felony punishable by fines and imprisonment. And there was concern in the industry for many years leading up to the adoption of the advisory opinion process that relatively innocuous commercial arrangements, um, are technically covered by the statute and the safe harbor protections weren't necessarily always brought enough to cover those. So that is sort of what led to both, you know, Congress providing OIG with this authority at the time, they all, they, you know, already had the authority to adopt Safe Harbor regulations, but those are sort of broader. Um, they, they deal with, you know, activity across the industry as opposed to very specific facts. Um, so parties can seek formal guidance re regarding the application of the anti-kickback statute, or as you mentioned, the, um, CMP for beneficiary inducement related to a particular arrangement under this process.
Speaker 2:Great. No, Kristen, that's, that's, that's really helpful. And Laura, same question for you. When and why would you go to CMS for an advisory opinion?
Speaker 3:Yeah, there's, um, you know, a, a, a wide range of, um, of reasons to do so. Um, but getting, getting into, um, jumping off of what Kristen said on the, the history of the advisor opinion authorities is a little bit first. Um, and it's a similar timeframe for, um, the Stark Law Congress amended stark clause in 1997, um, to require that the secretary issue advisor opinions concerning whether a referral relating to DHS other than clinical laboratory services prohibited by the Stark Law. Um, and despite this caveat, there has been a few, uh, clinical laboratory services. There have been a few advisor opinions related to, um, clinical labs. Um, and in terms of, um, and, and then CMS started be accepting advisor opinions in 1997. Um, but since that time, there's only been about one or two advisor opinions, um, published each year. Um, and as I mentioned, um, this is a part of the impetus for the changes to the advisory opinion process, um, in the regulations that were finalized on January 1st, 2020, is that C m s recognizes that, um, even though it intended this process to provide, um, meaning a meaningful source for the regulated industry to understand the applicability of the STAR plot hasn't in, in it hasn't in practice provided that meaningful guidance. Um, so, um, with, uh, the changes to the advisor opinions, regulations that went into effect, CMS is hoping that that will change, um, because now, um, oh, under the, um, revised star Stark regulations and advisor opinions bind, uh, on the Secretary of HHS and means that sanctions will not be imposed under the Stark Law with respect to individuals and any entities not only that are parties to the arrangement upon which the opinion was issued. Um, I'm sorry, not only the parties that requested the opinion, but parties, um, that are, are parties to the arrangement upon which the opinion was issued. And in addition, and notably, um, the secretary will not pursue sanctions under the Stark Law against any party to an arrangement that CMS determines is indistinguishable in all its material aspects from an arrangement, which with respect to which CMS issued a favorable advisor opinion. Um, and parties can even submit an advisor opinion request to determine whether CMS would view their arrangement as indistinguishable in all material aspects from another arrangement that has received a favorable opinion, uh, which will be issued by CMS on an expedited basis. Um, and CMS also indicated that individuals and entities can rely on ad advisory opinions as non-binding guidance that illustrates the application of Stark, um, and to the specific facts and circumstances described in the advisor opinion, um, which, uh, parties have done in practice what this is now acknowledged in, in the regulations. Um, and so in terms of, you know, when it would be, um, a party would decide when they would go to CMS for an opinion, um, you know, this, there's often oftentimes in, um, doing circle analysis, there's a lot of close questions. Um, and there's, there's a lot of costs involved in, um, uh, in the doing this analysis in the, in the first place. And then in, um, in, in seeking an advisory opinion, um, if there is, you know, sometimes a party might receive, uh, contrary opinions from, um, you know, different regulatory councils or perhaps they, um, they have opted to, um, advice council have opted not to enter into an arrangement that a competitor has perhaps entered into. Um, and they want to understand, you know, whether they could, uh, enter into a similar arrangement, um, if, if CMS were to issue a favorable advisor opinion. Um, and then, and also, you know, we have not yet seen because of, there's still been so little advisor opinions issued, including only two, uh, in the last calendar year. I don't know that anyone has really been taken advantage, um, to, to a great extent, to this new provision of the regulations that specify that, um, the secretary will not pursue sanctions against any party to an arrangement that CMS determines is indistinguishable in all its material aspects from an arrangement with respect to which CMS has issued a favorable advisory opinion. Um, but I think that over time, that that provision in particular, um, will hopefully provide a lot of really useful, um, guidance and comfort to parties, particularly as we all, um, seek to, to understand what the, um, final stark regulations under the regulatory sprint, uh, particularly as they relate to, to value-based enterprises and new innovative arrangements that parties wanna enter into. Um, that and how those fit into the exceptions that just came out, will, um, you in particular will lead to a lot more useful guidance and, uh, hopefully more taking advantage of that.
Speaker 2:Well, thank you, Laura, for, for that, uh, uh, exposition on the, on the recent changes and the ability to rely on, uh, advisory opinions, et cetera, I think it's important to note, um, that there might be some distinctions there between, uh, CMSs, um, you know, authority to allow others to, uh, either use, um, the advisory opinions as non-binary guidance versus OIGs, um, uh, uh, uh, authority there. But maybe we could dig into that momentarily. I wanna turn it over to Kristen. Um, talk to me a little bit about the, uh, OIG advisory process, how it works. How does somebody originate a request? How long does it take? What can we expect from oig? Uh, when, when, when you submit a request for an advisory opinion?
Speaker 4:Sure, sure. Matt and I do think it's important that we revisit on this, who can rely on the, the OIG advisory opinion, cuz as you pointed out, it is a little bit different. But in terms of the process, um, the OIG has a great website on the advisory opinion, um, both listing it's, you know, previously issued advisory opinions as well as the process and walking you through the regulations and common questions to be asking yourself the information to gather, et cetera. But in general, the requesting party must gather the information related to a proposed or actual arrangement that they intend to enter into. You can't just seek advice on something that you do not plan to undertake if should you get a favorable advisory opinion. They don't want hypotheticals. Um, you know, general information required includes identification information related to the requester, other potential parties, you know, identifying the per, one of the important things is to identify the precise question you're asking to the OIG in terms of their regulatory authorities and statutory authorities. You're asking them to weigh in on, are you asking a question about the application of the anti-kickback statute? Are you asking about a particular safe harbor regulation? Are you, for example, very close to meeting a safe harbor? If that's the case and there's only one or two elements you're not meeting, you know, you wanna incorporate that and advocate as to why, um, you know, not meeting those elements. There's still sufficient the safeguards in place. Um, you know, as a best practice, you have to provide relevant background information and a factual description of the arrangement as a best practice. We typically recommend including an analysis, make the OIGs job easier on them by describing the analysis. You know, in addition, you, you know, as part of the process, you have to have a certification from the requester, whether it be the requester himself or, um, if it's an entity, a responsible party at that requester. In terms of, um, sort of timing, uh, an OIG advisory request, there is sta or, or regulatory timing around it, which is really helpful. Within 10 days of submission, the OIG will formally accept it. Um, we'll either formally accept the request for an advisory opinion, notify the requester of what in additional information is needed, or decline to formally accept the request. And once it's accepted, the OIG has 60 days to issue the advisory opinion. Now that 60 days can be told at various points if they need additional information. And so, you know, on average, I think what I've seen is the process can take, you know, six to nine months, but it's a relatively, you know, quick process in the grand scheme of things. And then one thing to keep in mind, um, is that the party is responsible for the fees associated with the OIGs fees associated with preparing the advisory opinion. Um, I think the latest charge is about 160 or$176 per hour. The parties can request an estimate ahead of time, um, or set sort of a cap, but then once you hit that cap, OIG g notify you and then make a determination as to whether or not you wanna proceed forward with it. But that, again, would sort of toll your timing. So that's sort of the general process. Generally, prior to issuing an advisory opinion, they will have an informal dialogue. There'll be requests for information if, for example, they need additional information to consider the, the question posed or additional factual certifications. But prior to issuing it, you te typically will get a reach out for an informal discussion related to where the OIG is going with the analysis, and you have an opportunity, for example, if you wanted to withdraw that request, um, and then you're required to make that payment prior to the issuances of the advisory opinion.
Speaker 2:No, that's great, Kristen, and, and I appreciate in particular the concept of fees associated with the advisory process. Laura, quickly, um, does cms, um, similarly charge fees for the advisory process?
Speaker 3:They do, yes. And that was part of what was re change in the recent, uh, regulatory changes. Um, it went from an initial fee of 250 to, there's now an hourly rate of$220. Um, so that's a bit more than what Chris indicated for the, the oig. Um, and then in addition to that, um, CMS can charge any fees for any out outside experts that they bring on, such as like an accountant or another outside expert that they would bring on. And just like with oig, as Kristen mentioned, um, the requesting party can designate a triggering dollar amount if, um, they're not able to pay over that amount.
Speaker 2:That's, uh, that's great, Laura. In fact, it's a good segue into my next question. Uh, you mentioned bringing on experts. How do the agencies form their guidance? Can they rely on or use outside experts or evidence? It sounds like they can, uh, can they conduct an investigation as part of the process? Um, uh, uh, Laura, maybe we'll start with you on the CMS side.
Speaker 3:Sure. Yeah. The, the regulation specify that CMS can request expert advice from qualified sources if they believe that advice is necessary to respond to request for an advisor opinion. Um, such as like an accountant as I mentioned. Um, and CMS will notify the requester of, uh, if it thinks that this is necessary and the estimate of the cost for that advice. Um, and then same as it arranges for that expert to provide, uh, provide that review.
Speaker 2:And Kristen, uh, similarly on the OIG side, what's the process for using outside evidence, consultants, experts, et cetera?
Speaker 4:Yeah, similarly, the OIG regulations expressly allow them to seek out expert opinions and provide some examples of medical reviewers, quality improvement organizations, um, and the like to obtain medical opinions on specific issues. Once that request is made, their, their timeframe is told, um, how I talk about that 60 days. And they also, um, require that their b payment associated with that expert opinion.
Speaker 2:That's great. That's great. Now turning back to the question that we asked before about relying on opinions, um, Laura, in a nutshell, who can rely on a C M S advisory opinion?
Speaker 3:So the individual or entity that requested the advisory opinion, of course, may rely on the favorable opinion. Um, but in addition, as I mentioned, um, other individuals or entities that are parties to the arrangement upon which the opinion was issued, um, can also rely on the opinion. Um, and then while, while not speak in the language of reliance that the regulations indicate that the secretary will not pursue sanctions, um, under the stark ab against any party to an arrangement that c m s determines is indistinguishable in all its material aspects from an arrangement with respect to which C M S issued that favorable opinion. Um, and as I mentioned, you can submit, uh, request to determine whether CMS views the arrangement as indistinguishable, um, which is helpful. And then beyond that it's in, go ahead.
Speaker 2:I was just gonna, I was gonna gonna say, so it's almost as if with this indistinguishable in all material aspects, you could get an advisory opinion on the advisory opinion.
Speaker 4:Exactly. That's right.
Speaker 2:Got it. Got it. Kristen, turning over the OIG and kickback side, who can rely on an OIG advisory opinion
Speaker 4:Regulation only the requesters and someone who has joined in that request can rely on the advisory opinion. Um, it has no application on any individual or entity that does not join or is just, you know, for example, viewing a copy of the, the advisory opinion on the website. I think people view, people in the industry view these advisory opinions as very helpful guidance. Um, but you know, the OIG basically is only providing the relief or, or, you know, will not impose sanctions if it, if it issues a favorable advisory opinion on the particular requesters. Um, one of the things too to keep in mind within oig, uh, advisory opinion request, and I think this Laura would say on the CMS side, is the OIG is really only a pining on those regulations and statutes under which it has authority. So the advisory opinion is not binding on anyone on the government side that's outside of the oig, um, purview. It's, it's the OIG G'S views on the legal and factual issues that were raised as part of the advisory opinion request. So for example, the OIGs guidance isn't binding on CMS as part of the Stark protocol, and in fact, they won't weigh in on, on stark related issues.
Speaker 2:That's good guidance, Kristen. And, um, you know, sort of thinking about, um, the scope of the opinion, just as you say, Kristen, you know, what guidance can we expect from OIG and a kickback or beneficiary inducement advisory opinion?
Speaker 4:Sure. So generally what you will see is the OIG will provide guidance to the requester as to whether or not the, um, factual arrangement or the arrangement that party intends to undertake or has started to undertake, um, as to whether it implicates the, the anti-kickback statute or complies with the Safe Harbor regulations or otherwise, you know, implicates exclusion authorities or their C M P authorities. And generally what you'll see in a favorable opinion is that either it doesn't implicate the authorities or, um, o I o opine that it fell within a safe harbor. Um, or more often is the case. You'll see a statement from the OIG saying that this could be remuneration under the anti-kickback statute, for example, that could, you know, trigger that, that could implicate the statute. However, given, you know, the parties, if they describe the arrangement and have put in sufficient safeguards and the, like the OIG might say, given this factual circumstance and the safeguards that they, the parties have certified to, we won't impose sanctions in this circumstance. On the flip side, you know, they might on a, on a negative opinion say that, you know, this triggers the, the anti-kickback statute and depending on the party's intent might lead to, you know, sanctions under the anti-kickback statute or the CMPs.
Speaker 2:And Laura, same question for you. What guidance can we expect from a CMS advisory opinion?
Speaker 3:Sure. So the advisor opinion request, um, concerns whether physician's referral relating to dhs, um, is prohibited under Stark and CMS determines whether the business arrangement that the parties ascribe, um, appears to constitute a financial relationship as defined by Stark, um, that could potentially restrict a physician's referrals or whether the arrangements or the DHS at issue qualifies for any of the, the stark exceptions. Um, and just like with, with oig, the request has to relate to an existing arrangement are one in which the requester in good faith plans to, uh, specifically plans to enter, um, at which can be contingent upon them receiving a favorable advisory opinion. Of course.
Speaker 2:Now let's turn to, uh, recent changes, uh, in the healthcare environment that might have an impact or be impacted by the advisory opinion, uh, process. And, and, and by this I mean covid 19, the response to Covid 19, and then also the move to value-based care and care coordination models that we've seen hhs uh, so open to addressing over the past, uh, uh, year and a half or so. So maybe starting with covid-19, um, what, what's been the impact on advisory opinions at cms? Laura? Have we seen an increase? Have we seen, um, a focus on this, on a change in focus of substantive, uh, um, uh, guidance given by the agency? Do we expect to see more?
Speaker 3:Yeah, so I would say that there was really not a noticeable difference in the, in the last year, um, based on covid 19 in the, um, or the, OR for that matter. The, um, the, the changes to the Stark regulations on advisor opinions that came out just before COVID 19, um, and in, in 2020. Um, so, and we saw just two advisor opinions come out, um, in calendar year 2020, that did not really differ too much, um, uh, in from the type of advisor opinions that, um, CMS has issued historically. So topically, um, didn't, not, not a, a big change based on, on covid-19. Um, and also didn't, you know, have not seen anything on, for example, um, the, the waivers related to covid 19 purposes. Um, you know, know, perhaps CMS has been more, uh, uh, more willing to, um, talk with parties in informally or again, you know, there's costs and otherwise prohibitive to some parties and, and, and seeking advisor opinions.
Speaker 2:And Kristen, same question for you on the OIG side. Has there been any shift in either topical areas or impact, uh, or other impacts from, uh, COVID-19 in the response to Covid-19?
Speaker 4:Well, in, in response to Covid-19, the OIG came out with a pretty strong statement that it would exercise enforcement discretion related to, you know, it, it's authorities during the, the pandemic. Um, and as part of that, they actually created sort of a separate process that I don't know if advisory opinion light is the right way to call it, because it's really just an FAQ process, um, that they allowed parties to pursue, um, quicker informal guidance from the agency related to the COVID 19 emergency and arrangements directly impacted by that. Um, so as part of that process, which is really outside of the advisory opinion process, I, I, I jokingly call it light because I think there's, um, some strong differences between it. But as part of that process, the OIG was willing to accept email questions, um, around their administrative enforcement authorities, including the federal anti-kickback statute and the C M P related to beneficiary inducements related to various arrangements that might impact, you know, providing care during COVID 19. So some sample topics that we saw, um, can a hospital's pharmacy or health system provide other providers or suppliers with items related to vaccine storage, distribution administration, things that might otherwise trigger the anti-kickback statute? Um, the OIG was willing to provide some advice that is, you know, applicable during this public health emergency that they might otherwise, um, find would implicate these statutes. Can clinical laboratories offer free covid 19 antibody testing while providing other medically necessary blood tests? Um, so Id put some pretty, um, strong caveats on sort of the enforceability of this. Again, it's not binding on other agencies, it cannot guarantee prospective immunity or protection from OIG sanctions. And again, can't com can't opine on the Stark Law, but it's very helpful guidance, it's out there on their website. Um, in terms of the advisory opinion process, still there, still available? We saw nine opinions get issued last year, which I don't think was a significant drop off from the prior year. Um, I think there were six in 2019. So submissions maybe have flowed during the pandemic, but I expect that, um, parties will continue to avail themselves of that process for arrangements that are outside of the PhD. And, you know, as we move into this value-based world where the Stark, um, exceptions are significantly different in some instances from the OIG safe harbors, I wouldn't be surprised if we start seeing some questions where parties, you know, might be able to fit something in a stark exception or Stark is not otherwise implicated, but they can't quite fit it squarely into one of those new value-based safe harbors where you might see some questions there. Or you might see questions for entities that were carved out of protection under those value-based safe harbors, you know, labs, CME companies and the like, might wanna get some comfort through an advisory opinion if they're gonna wade into, um, some of these value-based arrangements. One of the things I just wanted to mention, Matt, just circling back on sort of the topics that are covered by advisory opinions, and, and this goes with what I was just talking about, one thing OIG will not opine on is the fair market value of goods items or services, or whether an individual is a bonus by the employee within the, the IRS code. So I just wanted to mention that because I think a lot of parties, you know, sometimes wanna ask if something is fair market value, but OIG will not weigh in on that piece.
Speaker 2:Certainly, certainly. No, and it's really good advice and, and and, and really good insight on the changes and effects that we've seen, uh, over the last, you know, 12, uh, 18 months or so, uh, on the advisory process. It sounds like both on the CMS side and the OIG side, things are up and running, uh, and still moving along at a, at a normal clip. Uh, but, but always a good reminder that, uh, those processes are there, uh, for folks to avail themselves up and, uh, do provide, uh, uh, really good insight into how the agencies, uh, evaluate and assess the Kickback statute, the Stark Law, and, uh, and the other laws and regulations that apply to healthcare fraud and abuse. Uh, Kristen Carter and Laura Morgan, thank you so much for joining us, uh, for this edition of the American Health Law Association Fraud Abuse Podcast. Uh, as noted, uh, for our listeners, uh, please, uh, tune in, uh, for a future edition on self-disclosure, uh, with the agencies, and we'll continue this sort of CMS and O I t discussion. And of course, thank you as always to our sponsor, B r g, uh, for working with us and for, uh, supporting this podcast. Please, uh, uh, you can download the American Health Law Association podcast, uh, anywhere you, and we hope thanks.