AMARILLO, TX – In the non-health care space, contracts, business arrangements, and joint ventures need to make sense from a financial standpoint. The parties to the contracts/arrangements want to (i) make money and (ii) be protected in the event the arrangement “goes south.” As a general rule, there is not a lot of focus on statutes and regulations.

The situation is 180 degrees different in the health care space. Granted, the parties to a contract/arrangement want to feel comfortable that the arrangement makes sense from a financial standpoint. However, more importantly, the parties need to feel comfortable that no federal laws are being violated. Because so much of health care is directly/indirectly paid for with federal tax dollars, there are a number of statutes and regulations that health care providers must adhere to when they enter into contracts/arrangements with each other.

In particular, health care providers that enter into contracts and other business arrangements must ensure that the contracts/arrangements not violate the federal anti-kickback statute (“AKS”). In most cases, the providers will ask their health care attorneys to analyze the contract/arrangement and advise the providers regarding the risk of violating the AKS. Often, the attorneys will conclude that the contract/arrangement falls into a “gray area.” This compels the providers to engage in a risk analysis: How much of a potential kickback risk does the provider want to take on?

Receiving “gray area” advice is normally acceptable to parties to a contract/arrangement. However, there are instances in which the consequences of “getting it wrong” are so severe that the parties will instruct their attorneys to ask for an Advisory Opinion (“AO”) from the Office of Inspector General (“OIG”). This article discusses the “nuts and bolts” of requesting an AO.

How to Request an AO
A request for an AO must be submitted in PDF format to the OIG via email. The request must contain specific information and a signed certification. The OIG retains discretionary authority to accept or reject AO requests. If an AO is issued by the OIG, it is legally binding on the Department of Health & Human Services and the party requesting the opinion. Further, if the AO is favorable to the requesting party, it protects the requesting party from OIG administrative sanctions. The AO is not binding on any other parties, and the arrangement may nonetheless implicate other statutes and regulations outside the authority of the OIG.

Once a request is submitted, minor changes are permitted, so long as such minor changes are made in writing and submitted to the OIG with additional certifications. If major changes are required, the previously submitted request should be withdrawn and a new request should be submitted. A requesting party is permitted to withdraw its request at any time before the opinion is issued; however, the requesting party remains liable for any fees incurred up to the time of withdrawal.

If the OIG elects to accept the request, it will send the requesting party an acceptance letter. From that point, all correspondence related to the request should be transmitted to the OIG attorney shown on the acceptance letter. Generally, the OIG will initiate informal discussions with the requesting party’s designated contact person via telephone to assist the OIG with its review and analysis of the request. At the OIG’s request, the requesting party may be required to supply additional information and documentation.

Once an AO is issued, it is made available to the public, and a redacted version is posted on the OIG’s website.

What Must be Included in the Request
The AO request must contain the following information:

• Identity of the requesting party or parties, as well as any other actual or potential parties.
• Identity of any person or entity with an ownership or controlling interest in the above stated parties.
• Description of the arrangement, including the current status of the arrangement, and copies of relevant documents.
  • If the arrangement has not yet been finalized, drafts or a detailed narrative with descriptions of material terms that will be contained in future documents is required.
  • An AO request is not appropriate for hypothetical situations, general questions of interpretation, or “model” arrangements.
• The specific legal question for which the requesting party is seeking guidance.
• Identification of trade secrets or confidential commercial or financial information that the requesting party believes should be protected from public disclosure.
• Certification by each requesting party of the truthfulness of the information submitted.
• A statement confirming whether the requesting party is also seeking an AO from CMS about the arrangement.
• Designation of a contact person available to discuss the request.

What Can be Included in the Request
In addition to the required elements, the requesting party may include in its AO request:

• A request for an estimate of the cost for processing the AO.
• A designation of a “triggering” dollar amount.
• A legal analysis of how the requesting party would evaluate the arrangement under applicable law.

Timeline for Processing an AO Request
There is a 10-day period, beginning on the day the OIG receives the request, for the OIG to begin processing the request. It is within this 10-day period that the OIG will either (i) accept the request and issue the acceptance letter or (ii) decline the request.

AOs should be issued within 60 days after the request is received by the OIG, though this timeline may be extended or tolled based on certain circumstances. The OIG notes that “the length of time that it takes for the OIG to issue an opinion varies based upon a number of factors, including the complexity of the arrangement, the completeness of the submission, and how promptly the requestor responds to requests for additional information.”

Additionally, for complex requests where the OIG may enlist the assistance of an expert, “the time period is tolled from the time the OIG notifies a requestor of the need for an expert opinion until the OIG receives such expert opinion. 42 CFR § 1008.33(b).” The time period may be tolled while (i) the requesting party gathers additional information or documentation requested by the OIG, or (ii) the OIG awaits confirmation that the requesting party accepts costs and fees above the estimated cost or triggering cost.

Fees and Costs
The requesting party is required to pay all costs incurred by the OIG in responding to the request. If the requesting party requests an estimate for the cost of processing the AO request, “[after the OIG’s] initial, 10-day review of the request, [the OIG will notify the requesting party of its] estimate in writing and stop processing [the] request until [the requesting party] confirm[s] in writing that [the requesting party wants the OIG] to continue. A fee estimate is not binding, and the actual cost of the opinion may be higher or lower than the estimate. [The requesting party’s] written confirmation may include a new or revised triggering dollar amount.”

A requesting party may designate a “triggering” dollar amount. “The triggering dollar amount is intended to accommodate requestors who may want to limit the costs of receiving an advisory opinion. If the OIG estimates that the costs of processing the AO have reached, or are likely to exceed, the designated triggering dollar amount, the OIG will notify the requestor. See 42 C.F.R. § 1008.31(d).”

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Texas with a national health care practice. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].

Kianna L. Sitarski, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, a law firm based in Texas with a national health care practice. She represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Ms. Sitarski can be reached at (806) 345-6338 or [email protected].

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