Spotlight on Compliance: OIG solicits comments on use of inducements

Funding source is being considered

By J. Mark Waxman, JD
General Counsel
CareGroup Healthcare System

It would seem that two recent publications by the Office of Inspector General (OIG) indicate a desire by the agency to be less stringent when it comes to the use of inducements for clinical trial participation involving Medicare and Medicaid patients.

First, the OIG is soliciting comments on the development of exceptions to the rule against offering inducements to order or receive Medicare or Medicaid reimbursable items or services. In the clinical trial context, the concern has been that once coverage of physician, hospital and other routine services covered by Medicare and Medicaid become more available as a result of the National Coverage Determination in 2000, inducements that had been offered to stimulate participation may well cross the line to become illegal remuneration.1

In its announcement soliciting comments on this area, several specific situations were highlighted.2 The OIG noted that in any given trial, the value or volume of covered services may be substantial or incidental. The question is posed as to whether the application of the rule should be the same in each case. One hopes that however this issue comes out, the result is a relatively bright line test that provides clear guidance.

A second issue involves public benefit vs. commercial benefit. To the extent that an IRB is fulfilling its mandate to only approve trials that have potential value to patients in the form of generalizable knowledge, distinguishing between purely commercial and public benefit trials may unnecessary. It is not clear whether the effort to distinguish between these categories — likely based on funding source — will in fact lead to objective and fair distinctions.

Third, the OIG has asked for information about the nature and types of inducements used and their effectiveness. In this context, the OIG notes that it recognizes that parties other than a trial sponsor may offer free items or services. For example, a manufacturer might offer items for free to induce a patient to use the manufacturer’s products after completion of the trial.

Ironically, this latter concern did not seem to bother the OIG as it issued its second publication of note, Advisory Opinion No. 02-16 ("AO 2-16") (Dec. 23, 2002), addressing a supplier’s request for approval to waive Medicare cost-sharing obligations for self-monitored blood glucose equipment and supplies used by Medicare patients participating in the National Heart, Lung, and Blood Institute's (NHLBI) Action to Control Cardiovascular Risk clinical trial.

AO 2-16 is the third time that OIG has addressed NHLBI clinical trials. In all three opinions, the OIG concluded that the waiver "reasonably accommodates the need of an important, cost-sharing obligations of a government-sponsored scientific study without posing a significant risk of fraud and abuse of the Medicare Program."

The various factors articulated to justify acceptance of cost-sharing waivers in these three opinions may be instructive with respect practices required to qualify for any exception. They include the following factors:

  • overall patient responsibility for medical management remained in the hands of the patient’s regular primary care physician (00-5);
  • the important role of the protocol in establishing utilization standards (00-5; 98-6);
  • the waiver of cost-sharing amounts would be unlikely to influence choice of providers (98-6);
  • the study was a "product-oriented or product-specific" study (2-16);
  • the resolution of the issues addressed would have broad clinical consequences for all affected patients, not just Medicare beneficiaries (2-16);
  • the waiver was likely to enhance the likelihood of the success of the study by enhancing patient compliance with study requirements and retaining patients for the entire study (00-5; 98-6).

In addition to the foregoing, OIG contrasted the studies to commercial studies — those "initiated, organized, funded, managed, or otherwise sponsored by pharmaceutical companies or other private interests with no, or only limited, government involvement."

This suggests that it is only with governmental involvement, perhaps through competitive selection of clinical components and central facilities, can we be sure that improper inducements do not occur. It is hoped that such a doctrinaire approach will not prevail throughout the current decision-making process. Instead, OIG should focus on the role of the IRB in overseeing the clinical value and processes designed to protect patients in clinical trials, as well as the nongovernmental, clinical trial-oriented factors set out in these three advisory opinions in crafting guidelines regarding acceptable inducements in the clinical trial area.


1. §231(h) of HIPAA provided for the imposition of Civil Monetary Penalties if remuneration is paid to influence patients or potential to order or receive covered services or items.

2. 67 FR 72892 (December 9, 2002); see esp. Special Advisory Bulletin on Offering Gifts and Other Inducements to Beneficiaries (67 FR 55855, Aug. 30, 2002).