On June 27, 2016, the Department of Health and Human Services Office of Inspector General (“OIG”) issued a favorable Advisory Opinion, No. 16-07, relating to a savings card program under which individuals who have prescription drug coverage under Medicare Part D receive discounts on a drug that is statutorily excluded from Part D coverage.

According to the Advisory Opinion, the Requestor markets and distributes a prescription drug that has been approved by the U.S. Food and Drug Administration for the treatment of erectile dysfunction (the “Drug”). While the Drug is covered by many private insurance plans and some Federal health care programs, including state Medicaid programs and TRICARE, the Drug is statutorily excluded from coverage under Medicare Part D.

Under the arrangement, the Requestor offers and provides coupons, in the form of a savings card, which Medicare Part D beneficiaries (“Beneficiaries”) may use to receive discounts on the purchase of the Drug. Specifically, Beneficiaries may receive reductions on out-of-pocket costs greater than $15, up to a maximum benefit of $75 per prescription, on up to 12 prescriptions for the Drug, when they present their savings card and Drug prescriptions to their pharmacist.


Continue Reading OIG Issues a Favorable Opinion Regarding a Drug Savings Card Program

In a memorandum released yesterday, CMS announced that it is not finalizing the proposed guidance issued on September 29, 2014 regarding Direct and Indirect Remuneration and Pharmacy Price Concessions for Contract Year 2016.

The September 29th memorandum contained draft guidance that intended to implement changes to the Part D Program’s definition of “negotiated prices” that were finalized in May 2014 and effective for 2016. 79 FR 29844. Negotiated prices are, in short, the amounts that pharmacies actually receive and retain as payment on a Part D claim. Negotiated prices are reported by Part D sponsors to CMS via monthly Prescription Drug Event (PDE) submissions. Direct and Indirect Remuneration (DIR) are price concessions, including discounts and rebates, that serve to reduce the cost of the Part D drug. DIR is reported to CMS subsequent to the contract year to which the DIR relates. In the May 23rd final rule, CMS sought to clarify what comprises negotiated prices and therefore should be reported via PDEs. The amended definition of negotiated prices now includes “all price concessions from network pharmacies except those contingent price concessions that cannot reasonably be determined at the point-of-sale” and excludes “additional contingent amounts, such as incentive fees, if these amounts increase prices and cannot reasonably be determined at the point-of-sale”. 79 FR 29962. The additional contingent amounts that cannot be determined at the point-of-sale would be reported via the DIR reports. Okay, I’m following.


Continue Reading CMS Backpedals on DIR Pharmacy Price Concessions for CY2016

This year Crowell & Moring’s Healthcare Ounce of Prevention Seminar, (HOOPS), will focus on important legal and regulatory developments and their impact on the healthcare industry. Join us on October 27th and October 28th in Washington, DC as our healthcare attorneys and outside speakers share their perspectives on the latest developments in areas of interest

The Office of Inspector General, Department of Health and Human Services, has recently issued guidance for those of its contractors seeking to self-disclose reportable conduct under the Federal Acquisition Regulations (“FAR”). Under federal regulations governing relationships between the federal government and its contractors, any contractors with credible evidence of a potential violation of the False Claims Act or federal criminal law involving fraud, bribery, gratuity, or conflict of interest must make a timely disclosure of such violations to the Office of Inspector General for the agency with which they contract. Failure to timely self-report these potential violations can result in the suspension of contracts or the debarment of the contractor. This requirement applies only to contractors whose contracts are governed by the FAR and which are valued at over $5,000,000.

The guidance details the information required to be included on the disclosure form, including the date the issue was discovered, detailed descriptions of any internal investigation undertaken, and a quantification of the financial harm to the government and any potential overpayments. In addition to the guidance, issued in April of 2014, OIG has provided FAQs for contractors covered by the FAR who may be considering a disclosure.


Continue Reading OIG Issues Self-Disclosure Guidance for Contractors

Continuing the national trend toward marriage equality, the Obama Administration announced that it will allow same-sex married couples to qualify for Medicare benefits just like opposite-sex married couples. Following last June’s landmark Supreme Court decision in U.S. v. Windsor, which held that Section 3 of the Defense of Marriage Act (DOMA) is an unconstitutional

In a March 10, 2014 letter to Congress, CMS Administrator Marilyn Tavenner indicated that—based on concerns from Congress and the public—CMS shall not finalize the Proposed Rules’ proposals that would have:

  • Removed the protected class definition for immunosuppressant drugs used in transplant patients, antidepressants, and antipsychotic medicines used to treat schizophrenia and certain related disorders

On May 20, 2013, the Centers for Medicare and Medicaid Services (CMS) released the final regulations on the Affordable Care Act’s (ACA) medical loss ratio (MLR) requirements for Medicare Advantage and Medicare Prescription Drug Benefit Programs (PDP). The final MLR rule is largely identical to the proposed rule and generally tracks the requirements of the