On December 11, 2017, the Health and Human Services Office of Inspector General (OIG) posted a favorable Advisory Opinion, permitting a proposed pilot Program involving a collaboration between a pharmaceutical manufacturer (the Requestor), a trade association (Association), a Medicare Advantage Part D plan (MA Plan), a Hospital System, and a Vendor.  As proposed, the program would provide new technology to allow real-time access to patient discharge information for use by MA Plan pharmacists who conduct medication therapy management (MTM) services. 

The Program would focus on Medicare Advantage beneficiaries admitted to the Hospital System with one of the following diagnoses that are considered eligible conditions under the Hospital Readmission Reduction Program (HRRP).  To avoid penalties under the HRRP, hospitals have to establish processes to reduce unnecessary hospital readmissions.

  • Pneumonia
  • Congestive heart failure
  • Acute myocardial infarction
  • Chronic obstructive pulmonary disease
  • Elective total hip or knee arthroscopy

The Program would apply to any drug therapy taken by eligible MA Plan beneficiaries, including brand and generics.  The Medicare Advantage pharmacists would use the information from the Hospital System’s electronic medical record (EMR) to determine whether beneficiaries would receive MTM services under the Program.

These pharmacists would provide MTM interventions to eligible individuals, including:

  • Reviewing all the patient’s medications
  • Contacting the patient’s retail pharmacy
  • Interacting with the patient’s providers
  • Recommending adjustments to medications as needed
  • Interacting directly with patients to assist with enrollment in MTM
  • Ensuring patients understand the medications they are taking and the appropriate usage

Each of the Program collaborators would have a distinct role, although as of the date the Advisory Opinion was requested, the MA Plan and Hospital System had not yet been identified.. The Requestor would fund the Program and ensure compliance with legal and regulatory guidelines, but would not have access to the interface or data.  The Association would be the project manager, and provide services including contracting, data analysis, and training materials. The MA Plan would ensure integration of the EMR’s discharge notification system into the MA Plan workflow for initiating MTM services, engage the pharmacists for the MTM interventions, and report on various metrics. The Hospital System would provide administrators, quality officers, discharge planners and other leadership as needed for the Program, and would also ensure that resources are available to identify and recruit patients.  The Vendor would develop the interface needed for the Program, and would retain the associated intellectual property.

An operations committee comprised of the Vendor, MA Plan, and Hospital System would guide Program implementation, establish protocols, and manage daily activities.  A separate steering committee comprised of all the collaborators would review periodic updates including aggregate, summary level data and information on issues encountered, decisions made and lessons learned from Program implementation.

The OIG determined that although the Program could potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent were present, it nevertheless would not impose administrative sanctions.

The OIG concluded that the Hospital System would not receive any remuneration because it would not receive any new technology, and although the Hospital System might be able to avoid HRRP penalties, the OIG considered this to be a speculative benefit.  Additionally, because the interface was “limited use,” it did not comprise remuneration to the MA Plan, which is a finding consistent with prior OIG advisory opinions.

The  OIG concluded the Program would present minimal risk to patients or the Federal health care programs, even though the interface could remove some administrative burden from the MA Plan and the MTM pharmacists would be in a position to refer or recommend the manufacturer’s products.

In support of this conclusion, first, the OIG recognized that the provision of free technology by a pharmaceutical manufacturer for use by MA Plan pharmacists, could present a high level of risk by directly influencing the pharmacists to recommend the manufacturer’s products or influencing the MA Plan to place their products favorably in a formulary.  However, the OIG concluded the Program contained safeguards that would reduce this risk:

  • Requestor manufactures only two products that treat or prevent the eligible conditions under the Program, and one of these products is a vaccine;
  • all the agreements and operative documents would make clear that collaboration under the Program would have no direct or indirect bearing on formulary recommendations or referrals of business;
  • Requestor’s involvement would be limited to modest funding and certain legal and compliance services; and
  • Requestor would not be selecting data points, would not have access to the interface or underlying data, and the Program materials and interface would be unbranded with respect to Requestor

Second, the OIG concluded the Program would be unlikely to lead to increased costs or overutilization of federally-reimbursable services. The OIG pointed out that the MA Plan has a strong incentive for beneficiaries to receive the most appropriate and cost-effective treatment. The interface would be designed to enable appropriate beneficiaries to be enrolled in MTM services more quickly and efficiently, which the OIG noted should help them comply with their discharge plans.  Further, any conduct that would increase patient care costs would be against the MA Plan’s interest.

Third, the Program was not likely to interfere with the pharmacists’ clinical decision-making, and the interface would not guide the choice of one product over another.  The OIG again emphasized that the MA Plan, responsible for both medical and drug expenses, has an incentive to decrease costs by ensuring that patients receive cost-effective and appropriate treatment. The OIG concluded that any remuneration resulting from the Program would not change that incentive.

Fourth, the OIG found that the Program should improve quality of care and reduce readmissions.  The OIG stressed that transitioning from a hospital to a different setting is a vulnerable time for patients, and that if the MA Plan can access relevant information about inpatient stays immediately upon discharge, then the pharmacists can work with patients right away to avoid any gaps in care and help prevent readmissions.

Finally, the OIG found that the small scale of the Program would reduce the risk that any remuneration involved would influence referrals to, or recommendations for, the Requestor’s pharmaceutical products.  The Program was limited in number (approximately 200 patients), scope (five HRRP diagnoses), and monetary investment. The OIG stressed that hospitals have to establish processes to reduce unnecessary readmissions, in order to avoid HRRP penalties. The OIG also pointed out that MA Plans strive for cost containment, and hospital readmissions are expensive. As designed, the Program would involve testing to see whether minor improvements in technology for MTM services (that the MA Plan already provides) can help decrease readmissions.

The OIG cautioned that a similar arrangement with different facts might result in a different conclusion.  For example, the OIG noted that its conclusion may have been different where a manufacturer sponsor made or marketed more drugs to treat the eligible conditions, the manufacturer branded any of the information being presented to pharmacists during the Program, or if the interface was designed to recommend one drug over another.


As the OIG has emphasized, Advisory Opinions are issued only to the requestors of the opinion, and have no application to, and cannot be relied upon by, any individual or entity, nor may they be introduced into evidence by anyone other than the requestors to prove the individual or entity did not violate the anti-kickback statute, or any other law.