Actelion Pharmaceuticals Pays $360 Million to Settle Allegations of Kickbacks to Patients: Lessons Learned

Medicare patients were specifically excluded from the program.

The U.S. Justice Department announced on Dec. 6 that Actelion Pharmaceuticals has agreed to pay $360 million to resolve allegations that it paid kickbacks by giving contributions to the Caring Voice Coalition, a charitable organization that then used the contributions to pay the copays of patients purchasing Actelion drugs.

There had been several other settlements related to this same charity. Caring Voices had an received a favorable advisory opinion in 2006: https://oig.hhs.gov/fraud/docs/advisoryopinions/2006/AdvOpn06-04A.pdf

In a first, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) revoked that favorable opinion in late 2017: https://oig.hhs.gov/fraud/docs/advisoryopinions/2017/AdvOpnRescission06-04.pdf

The government’s core allegation is that by eliminating copayment issues, drug companies were able to raise prices without alienating patients because the patient wasn’t responsible for any share of the price. The government concluded that Caring Voices Coalition made misrepresentations when seeking the advisory opinion. In particular, the Coalition suggested that no patient-specific information would be shared with donors. In fact, the government believes that Actelion was gathering data about how many of the company’s patients used Caring Voice Coalition and geared donations to cover exactly the amount used by its patients – but not the patients who used a competitor’s drugs.

The government stressed that Actelion had a program to assist patients who were poor. However, Medicare patients were specifically excluded from the program. Medicare patients were sent to the Caring Voices Coalition.

What lessons can we learn from this settlement? That is not an easy question to answer. Certainly, one factor influencing this case is the belief that drug companies are rapidly increasing prices, and that this program allowed that trend to continue without prompting a political outcry. It is well known that routine waiver of copayments can be a problem. One interesting question is whether the government would have viewed the case differently if Actelion had used its own program to adjust the copayments.

I don’t know the answer, but I am confident that this case shouldn’t cause listeners to conclude that waiving copays for the poor is inherently problematic. It is not. Hospitals can, and if they are tax-exempt, should provide assistance to poor patients. I think the big lesson of the case is this: if you design a plan to lower patient responsibility broadly while not offering the same discount to insurers, you may face trouble.

When you try to find ways to “help” people with high-deductible plans, those plans are going to view it as a means to circumvent their agreement with their insured. Both the government and private insurers have copayments as a means to control utilization. Remember that an insurer’s obligation to pay a claim derives entirely from a patient’s obligation to pay.

The legal term is “indemnification;” the insurer is promising to absorb any costs for which the patient is responsible. Because of this, in most cases, when you tell a patient they don’t need to pay, the insurer doesn’t need to pay. That being said, when a patient is truly destitute, I don’t think many courts will absolve the insurer of a duty to pay. I am not aware of cases supporting that proposition, but I also don’t believe that there are any that undercut it.

The bottom line is that I feel comfortable concluding that it is permissible to waive copayments for the poor. However, be aware that any broader effort to circumvent the requirement may not be viewed as, dare I say, “copay-setic.”

For more discussion on recent cases, regulations, and legal risk, please sign up for my RACmonitor webcast on Dec. 18, “How to Avoid Legal Pitfalls: Learn from False Claims Act Cases and OIG Guidance.”

Part of staying out of trouble is staying on top of the government’s enforcement priorities.

Comment on this article

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn
Email
Print

David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

Related Stories

CMS Responds to Hawaii Wildfires

CMS Responds to Hawaii Wildfires

On Aug. 11, U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra officially recognized a Public Health Emergency (PHE) in Hawaii due to

Print Friendly, PDF & Email
Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Mastering the Two-Midnight Rule: Keys to Navigating Short-Stay Admissions with Confidence

Mastering the Two-Midnight Rule: Keys to Navigating Short-Stay Admissions with Confidence

The CMS Two-Midnight Rule and short-stay audits are here to stay, impacting inpatient and outpatient admissions, ASC procedures, and Medicare Parts C & D. New for 2024, the Two-Midnight Rule applies to Medicare Advantage patients, requiring differentiation between Medicare plans affecting Case Managers, Utilization Review, and operational processes and knowledge of a vital distinction between these patients that influences post-discharge medical reviews and compliance risk. Join Michael G. Calahan for a comprehensive webcast covering federal laws for all admission processes. Gain the knowledge needed to navigate audits effectively and optimize patient access points, personnel, and compliance strategies. Learn Two-Midnight Rule essentials, Medicare Advantage implications, and compliance best practices. Discover operational insights for short-stay admissions, outpatient observation, and the ever-changing Inpatient-Only Listing.

Print Friendly, PDF & Email
September 19, 2023
Secondary Diagnosis Coding: A Deep Dive into Guidelines and Best Practices

Secondary Diagnosis Coding: A Deep Dive into Guidelines and Best Practices

Explore comprehensive guidelines and best practices for secondary diagnosis coding in our illuminating webcast. Delve into the intricacies of accurately assigning secondary diagnosis codes to ensure precise medical documentation. Learn how to navigate complex scenarios and adhere to coding regulations while enhancing coding proficiency. Our expert-led webcast covers essential insights, including documentation requirements, sequencing strategies, and industry updates. Elevate your coding skills and stay current with the latest coding advancements so you can determine the correct DRG assignment to optimize reimbursement, support medical decision-making, and maintain compliance.

Print Friendly, PDF & Email
September 20, 2023
Principal Diagnosis Coding: Mastering Selection and Sequencing

Principal Diagnosis Coding: Mastering Selection and Sequencing

Enhance your inpatient coding precision and revenue with Principal Diagnosis Coding: Mastering Selection and Sequencing. Join our expert-led webcast to conquer the challenges of principal diagnosis selection and sequencing. We’ll decode the intricacies of ICD-10-CM guidelines, equipping you with a clear grasp of the rules and the official UHDDS principal diagnosis definition. Uncover the crucial role of coding conventions, master the sequencing of related conditions, and confidently tackle cases with equally valid principal diagnoses.

Print Friendly, PDF & Email
September 14, 2023
2024 IPPS Summit: Final Rule Update with Expert Insights and Analysis

2024 IPPS Summit: Final Rule Update with Expert Insights and Analysis

Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY24 Inpatient Prospective Payment System (IPPS) Final Rule, including new ICD-10-CM/PCS codes, plus insights, analysis and answers to questions from the country’s most respected subject matter experts.

Print Friendly, PDF & Email
2024 IPPS Summit Day 3: MS-DRG Shifts and NTAPs

2024 IPPS Summit Day 3: MS-DRG Shifts and NTAPs

This third session in our 2024 IPPS Summit will feature a review of FY24 changes to the MS-DRG methodology and new technology add-on payments (NTAPs), presented by senior healthcare consultant Laurie Johnson, with bonus insights and analysis from two acclaimed subject matter experts

Print Friendly, PDF & Email
August 17, 2023

Trending News