Access to and the cost of health care for children with complex medical needs is a significant burden for many families. Grants can serve as an important lifeline that allows families to obtain and afford medically necessary and appropriate care for their children. The U.S. Department of Health and Human Services, Office of Inspector General’s (OIG) favorable advisory opinion (25-10) is another positive step towards ensuring that children with special medical needs receive timely and affordable care.
The company (Company) provides specialized “family-powered therapy” to children with a particular disorder. Under this therapy model, clinicians provide care to children via telehealth while parents and caregivers receive training on how to support this therapy from home. The Company’s employees also created a tax-exempt, non-profit foundation (Foundation) to help defray the expenses of providing this therapy to certain eligible patients through grants.
OIG determined that this proposed arrangement (Arrangement) implicates the Federal Anti-Kickback Statute (AKS) and the Beneficiary Inducements Civil Monetary Penalty (CMP) because:
- the Company invested resources to establish and operationalize the Foundation and has made and intends to continue making donations to the Foundation; and
- the Foundation uses the donations to provide grants to eligible patients to defray the costs of the therapy.
OIG concluded, however, that the risk of fraud and abuse was sufficiently low to issue this favorable opinion because the Arrangement was unlikely to result in overutilization, inappropriately increased costs, patient steering, or unfair competition. OIG noted the following in support of this conclusion:
- Families must have a family-powered therapy plan in place before applying for a grant and while the grant value may increase with the number of prescribed therapy hours and adherence rates, the family’s expenses will likely increase, too;
- The only restriction is that the grant funding goes directly to the qualifying family to be used to defray expenses directly related to the care and support of the child;[1]
- Donations from the Company to the Foundation are unrestricted and are not dependent on any future actions by the Foundation (including referrals);
- As a non-profit, tax-exempt charitable organization, the Foundation awards grants to families in an objective manner that is not associated with any remuneration provided by the Company; and
- A family’s eligibility for a grant is not dependent on the use of any particular therapy provider.[2]
OIG’s favorable opinion is a welcome development for companies, non-profit organizations, and providers interested in using grants and other creative approaches to increase the likelihood that patients get timely and appropriate care.
A complete copy of the Advisory Opinion is here.
Should you have any questions regarding the above or wish to have a proposed arrangement evaluated for compliance with applicable laws, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].
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[1] Since families are not required to use the grant funds for cost-sharing amounts, providers would be unlikely to prescribe more therapy than necessary.
[2] Funding is available to families that satisfy certain guidelines, regardless of which therapy provider the family selects.