The OIG is authorized by HIPAA to issue advisory opinions regarding the application of the antikickback statute, the safe harbor provisions, and other OIG fraud and abuse sanctions to specific factual situations. The OIG advisory opinion process is separate and distinct from HCFA's advisory opinion process, which was created under the Balanced Budget Act of 1997 and relates solely to the applicability of the Stark self-referral statute.

The final rules governing the issuance of advisory opinions on the applicability of the antikickback statute, the safe harbor provisions, and other OIG fraud and abuse sanctions, 63 Fed. Reg. 38,311 (Jul. 16, 1998), are incorporated into title 42 of the Code of Federal Regulations in a new part 1008. 42 C.F.R. pt. 1008. They reflect the OIG's responses to comments made to the interim final regulations issued February 19, 1997. 62 Fed. Reg. 7350 (Feb. 19, 1997).

The legislative battle to require the government to issue advisory opinions on health care fraud and abuse issues was fought over several years. The health care industry argued that specific guidance was necessary to protect providers acting in good faith from unwittingly violating the law. Additionally, the scope and breadth of the antikickback statute places health care providers seeking to create and implement integrated health care delivery systems at risk of violating federal laws authorizing substantial criminal and/or civil penalties. The OIG and Attorney General, on the other hand, initially opposed the implementation of the advisory opinion process, arguing that it would overwhelm the government's resources and allow unscrupulous providers to seek protection by disguising otherwise abusive activities.

The final advisory opinion rules seem to indicate a shift from this position. Not only does the OIG have flexibility to respond to the individual circumstances of each advisory opinion request under the new rules, but the agency seems to be exhibiting a willingness to work with the parties requesting advisory opinions, on both a formal and informal basis.

HIPAA dictates that the OIG is to issue advisory opinions addressing the following areas:

prohibited remuneration under the antikickback statute;
exceptions to the antikickback statute;
regulatory safe harbors;
inducements to reduce or limit services to individuals under federal health care programs; and
imposition of criminal or civil sanctions.

The law explicitly provides that advisory opinions should not address issues of fair market value or bona fide employment. In the preamble to the final rules, the OIG indicated that it would issue advisory opinions on the shared-risk safe harbor pending the outcome of the negotiated rulemaking,although such advisory opinions would be subject to modification or termination upon the issuance of the final rules.

In addition to giving a general description of advisory opinions, the advisory opinion statute and regulations address:

parties seeking advisory opinions;

initiating the process for an advisory opinion;

safeguards against unscrupulous requestors;

fees charged requestors;

responsibility of the OIG in reviewing advisory opinion requests;

dissemination of advisory opinions;

rescission of advisory opinions; and

scope and effect of advisory opinions.

Parties Seeking Advisory Opinions
Although the regulations suggest that any individual or entity may submit a request for an advisory opinion, they require either that the arrangement be in existence at the time the request for an advisory opinion is submitted, or, if the arrangement is prospective, that there be a "good faith intention" to enter into the described arrangement in the near future. See 42 C.F.R. § 1008.11. The preamble to the interim final rules allowed that if the relationship was not in place at the time of the request, the requestor "can declare the intention to enter into the arrangement contingent on the receipt of a favorable advisory opinion." 62 Fed. Reg. at 7352.

The regulations require that "[t]he requestor must be a party to the arrangement, or proposed arrangement, that is the subject of the request." 42 C.F.R. § 1008.11. In the preamble to the interim rules, the OIG noted that those not directly involved in the relationship "are not in a position to provide a reliable statement as to the facts of a particular arrangement…" 62 Fed. Reg. at 7352. The OIG further indicated that if a requestor is not a party to the arrangement, "it is unclear who would be bound by an advisory opinion on an arrangement not involving the requestor." Id. To dispel any confusion, the OIG recognized in the final rules that attorneys may submit advisory opinion requests on behalf of their clients. The clients, though, are required to sign a certification as to the truthfulness of the submissions.

The OIG specifically rejected the suggestion that it entertain anonymous requests, because "[e]arly identification of requestors helps the OIG determine whether the party making the request is under investigation," 63 Fed. Reg. at 38,316, or otherwise would be precluded from receiving an advisory opinion.

The OIG has stated that it is not prepared to issue advisory opinions based on hypothetical or generalized factual circumstances. In the preamble to the final rules, the OIG specifically rejected the suggestion that it should issue advisory opinions to trade associations. The OIG stressed that advisory opinions should address currently existing or specific proposed arrangements, and indicated that industry guidance is addressed more appropriately through safe harbor regulations and special fraud alerts.

Initiating the Process for an Advisory Opinion
A party wishing to initiate the advisory opinion process must submit a written request with a complete description of the underlying facts. See 42 C.F.R. § 1008.36. The regulations require that the request specify the sanction or sanctions which may be applicable to the arrangement. In the preamble to the final rules, the OIG reiterated the need to identify the legal authorities that may be implicated by an arrangement and cautioned that a blanket designation of all of the OIG's fraud and abuse sanctions is insufficient and will prompt the OIG to request substantial additional information.

Every request for an advisory opinion must include:

the identities, including the names and addresses, of the requestor and all other actual and potential parties to the arrangement;
the name, title, address, and daytime telephone number of a contact person who will be available to discuss the request with the OIG on behalf of the requestor;
a complete and specific description of all relevant information bearing on the arrangement, including background information, complete copies of all operative documents, and detailed statements of all collateral or oral understandings, if any;
signed certifications (as discussed below); and<
a check or money order payable to the Treasury of the United States in the amount of $250 (as discussed below).

See 42 C.F.R. § 1008.36. The extent of the required submissions has been labeled by some as burdensome on potential requestors. As acknowledgment of the difficulty in determining the specific types of information needed to evaluate an arrangement, the OIG will provide suggested preliminary questions and will allow potential requestors to write for specific guidance. See 42 C.F.R. § 1008.18.

The OIG rejected several comments suggesting that requestors should not be required to provide information about the identity of other participants in an arrangement if the other participants are not actual requestors. Among the several reasons given for needing to know the identity of the parties to render an informed decision, the OIG said that knowing the identity of the participants helps determine if the arrangement in question or similar arrangements are the subject of an ongoing investigation or government proceedings. Nevertheless, the OIG acknowledged that it is not possible or practical in all circumstances to identify all potential participants. In such circumstances, a requestor must explain in its request why the identities of all potential participants cannot be provided.

The OIG noted with the interim final rules that the aforementioned requirements include the submission of "all relevant documents, such as contracts, leases, employment agreements and court documents, as well as descriptions of any other understandings that may affect the documents." 62 Fed. Reg. at 7352. The OIG clarified in the final rules that the specific operative documents required to review an arrangement depend on the nature of the arrangement. Requests concerning existing arrangements need be submitted only with the portions of documents that are relevant to the arrangement at issue, but requestors must identify and describe in general terms the portions of the documents that have been withheld. The OIG retains the right to request additional portions of the documents before issuing an advisory opinion. However, requests concerning proposed arrangements do not require complete copies of all operative documents and, instead, may include draft or model documents or detailed descriptions of material terms. The inherent risk, according to the OIG, is that material differences between the drafts and the final operative documents may affect the enforceability of the advisory opinion.

In a significant change from the interim final rules, the OIG eliminated the requirement for submitting provider numbers in every case from the final rules, but reserved the right to request provider numbers in particular circumstances. The final rules continue to require the requestor's Taxpayer Identification Number to be submitted with a request, pursuant to the Debt Collection Improvement Act of 1996, 31 U.S.C. § 7701(c). See 42 C.F.R. § 1008.36(b)(8).

The OIG expressly stated in the preamble to the final rules that a copy of a requestor's current HCFA Form 1513 is sufficient to satisfy the requirement for disclosure of ownership and related information. See 63 Fed. Reg. at 38,317.

To facilitate coordination between the OIG and HCFA, requestors are required to notify the OIG if they also are applying to HCFA for an advisory opinion concerning applicability of the Stark self-referral statute. See 42 C.F.R. § 1008.36(b)(7).

The advisory opinion regulations require a party submitting a request for an advisory opinion to provide two certifications. See 42 C.F.R. § 1008.38. First, the individual "responsible" for the request must certify that all of the information provided is true and correct and constitutes a complete description of the facts regarding which an advisory opinion is sought. Second, if the request relates to prospective conduct, the requestor must certify that the parties intend to enter into the arrangement contingent upon the receipt of a favorable advisory opinion.

Safeguards Against Unscrupulous Parties
Acknowledging efforts made to limit the exposure of requestors following an unfavorable advisory opinion, the OIG asserted that the risk associated with submitting an advisory opinion is unavoidable because, without such exposure, "unscrupulous parties could use the advisory opinion process to immunize themselves from prosecution." 63 Fed. Reg. at 38,317.

The OIG explained that requestors seeking advisory opinions on proposed arrangements are required to certify a good faith intent to enter into the proposed arrangement as a "safeguard[] against abuse of the advisory opinion process by requestors seeking opinions about competitor's practices or hypothetical questions." Id. From a practical perspective, the OIG recognized that such a certification does not prevent a requestor from abandoning a proposed arrangement for legitimate business reasons.

The OIG rejected the suggestion that it give requestors prior notice of an unfavorable opinion thereby allowing the requestor to withdraw or modify the request.

The OIG expressed a concern that such notice "could permit unscrupulous parties to misuse the advisory opinion process to 'test' hypothetical arrangements…" 63 Fed. Reg. at 38,319.

Fees Charged Requestors
HIPAA requires that the OIG's advisory opinion regulations impose a fee "equal to the costs incurred by the Secretary in responding to the request." Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, § 205, 110 Stat. 2002 (1996) (codified at 42 U.S.C. § 1320a-7d(b)(5)(B)(ii)). With its final rules, the OIG claimed that, because it did not have enough experience to accurately estimate costs, it could not accommodate requests that the fees charged for advisory opinions be limited.

A request for an advisory opinion must be accompanied by a nonrefundable $250 "initial processing" fee, see 42 C.F.R. § 1008.31, because according to the OIG, "it is unlikely that even the simplest advisory opinions will cost the agency less than $250." 63 Fed. Reg. at 38,315.

The OIG initially estimated that the time for responding to advisory opinion requests would range from three to forty hours, with the actual cost of processing such requests, including salaries, benefits and overhead, totaling approximately $100 per hour. In the preamble to the final rules, the OIG revealed that the total fees for the advisory opinions issued as of July 1998 ranged from $1,500 to $3,000, with some costing much less.

Despite its current difficulty with estimating the cost of advisory opinions, the OIG suggested in the preamble to the final rules that it may be able to give binding estimates or fee schedules as it gains more experience with the cost of preparing advisory opinions. As a step in that direction, the OIG revised the advisory opinion regulations to allow for the issuance of initial, nonbinding estimates upon request. See 42 C.F.R. § 1008.31(d)(2). The initial estimate is issued when the request is accepted, but the OIG then tolls any further action on the advisory opinion until the requestor gives written authorization to continue. It is important to remember that these initial estimates are not binding on the OIG.

To avoid the possibility of open-ended fees, the regulations provide that a requestor may designate a "triggering dollar amount" in the advisory opinion request.

See 42 C.F.R. § 1008.31(d)(3). If the OIG determines that the cost is likely to exceed the triggering dollar amount, it will stop processing the request and promptly notify the requestor. The requestor then is given the option of either authorizing continued processing or withdrawing the request for the opinion. In the event the request is withdrawn, the requestor is charged for the costs incurred through that point.

The OIG recognized that it may need to consult with outside experts in developing certain advisory opinions. In such cases, the OIG will obtain an estimate of the outside expert's fees and give the requestor the option to proceed with or withdraw the request. See 42 C.F.R. § 1008.31(e)(2). The requestor is responsible for the actual costs of any expert opinions.

Responsibilities of the OIG in Reviewing the Advisory Opinion Requests
The statutory authority for advisory opinions requires that they be issued within 60 days after the request is received. The OIG has indicated that it will "promptly examine" all requests to determine whether they contain sufficient information to form the basis for an informed advisory opinion. The regulations provide that the OIG will, in all cases, notify the requestor within 10 working days after receiving the request whether it believes that it has sufficient information to proceed or whether it will need additional information. See 42 C.F.R. § 1008.41. Alternatively, the OIG may decline to formally accept a request. When the OIG deems that it has sufficient information and accepts a request, it will notify the requestor by U.S. mail. The OIG reserves the right to determine later that additional information is necessary.

The regulations provide that the 60-day response time begins to run on the day the OIG determines that it has sufficient information to proceed. The 60-day period will be tolled, however, when the OIG

notifies the requestor that the costs have reached or are likely to exceed the triggering dollar amount — until such time that the OIG receives written notice from the requestor to continue processing the request;
requests additional information from the requestor — until the OIG receives the requested information;
notifies the requestor of the full amount due for the advisory opinion — until the OIG receives payment of the full amount owed; and
notifies the requestor of the need for expert advice — until such time that the OIG receives the expert advice.

The OIG will not release an advisory opinion unless and until the fee is paid in full.

Dissemination of Advisory Opinions
Because all advisory opinions are subject to public disclosure, they are made available for public inspection at the OIG headquarters in Washington, DC and on the OIG's web site. See 42 C.F.R. § 1008.47.

Before releasing an advisory opinion to the public, the OIG redacts the names of the parties, any references to the jurisdictions involved, and any other identifying information. Proprietary or confidential information, such as pricing, normally is not included in advisory opinions. Nevertheless, requestors should recognize that the documents submitted to the OIG as part of their advisory opinion requests are subject to public disclosure under the Freedom of Information Act (FOIA). A requestor should specifically identify any information or documents it believes are not subject to disclosure under FOIA, e.g., information containing trade secrets or privileged and confidential commercial or financial information protected from disclosure.

Requestors must take into consideration that they are not immune from investigation based on information they submit with advisory opinion requests. In response to concerns that the OIG was misapplying congressional intent with its suggestions that information submitted as part of an advisory opinion request could serve as the basis for an investigation, the OIG emphasized that the antikickback statute is a criminal statute and that "[a]s a law enforcement agency, the OIG cannot ignore information lawfully obtained to further legitimate governmental purposes." 63 Fed. Reg. at 38,321. The OIG also "reserve[d] the right to make disclosures other than in response to FOIA requests where the public interest requires, to the extent authorized by law." Id.

Rescission of Advisory Opinions
As clarification of its ability to affect the finality of an advisory opinion, the OIG substituted the word "terminate" for "revoke" in the final rules, thus giving itself the option of terminating, rescinding, or modifying an advisory opinion.

A "rescinded" advisory opinion "is revoked retroactively to the original date of issuance," 63 Fed. Reg. at 38,319, and will be deemed to have had no force or effect from its date of issuance. Rescission indicates that a requestor's submissions did not fully and accurately provide all material information regarding the arrangement.
A "terminated" advisory opinion is revoked, and is no longer in force and effect, as of the termination date, but will be considered to "have been in effect as originally issued from the date of issuance until the date of termination." Id.
A "modified" advisory opinion is amended, altered, or limited. It is considered in effect in its original form until the date of modification and thereafter continues in effect in its modified form. See id.

Prior to rescinding, terminating, or modifying an advisory opinion, the OIG will notify the requesting party and give it an opportunity to comment. However, the OIG said it expects "rescissions, terminations, and modifications of advisory opinions will be rare…" 63 Fed. Reg. at 38,320.

Termination or modification is likely to result from changes in the law or business operations of the health care industry, changes in medical science or technology, or changes in the arrangement during the course of implementation or operation. Following termination or modification of an advisory opinion, the OIG requires that the requestor "promptly discontinues such action…" 63 Fed. Reg. at 38,320. The OIG recognizes, however, that "it may be impracticable to discontinue immediately certain complex business arrangements" and will afford "a reasonable opportunity to unwind otherwise disengage from arrangements" after termination of an advisory opinion. Id. Alternatively, no unwinding period will be granted for an advisory opinion that is revoked because the requestor failed to provide material information or provided untruthful information.

Scope and Effect of Advisory Opinions
As required by the statute, advisory opinions are binding only on HHS (including the OIG) and the requestor. In fact, the regulations specifically provide that no one other than the requestor may rely on the advisory opinion. See 42 C.F.R. § 1008.53. Furthermore, the regulations specifically provide that the advisory opinion "will not affect the requestor's, or anyone else's, obligations to any other agency, or under any statutory or regulatory provision other than that which is the specific subject matter of the advisory opinion." 42 C.F.R. § 1008.59(b). One important consequence of this limitation is that the DOJ is not bound by OIG advisory opinions.

Pursuant to the statute, the regulations confirm that the failure of a party to seek an advisory opinion may not be introduced into evidence to prove that the party intended to violate the law. See 42 C.F.R. § 1008.55(b).

Conclusion
According to the preamble to the final rules, the goal of the OIG advisory opinion process is "to render meaningful and informed opinions based on a complete and comprehensive understanding of the relevant facts and circumstances of a given arrangement, protecting in the process only those arrangements that pose little or no risk of fraud and abuse to the Federal health care programs." 63 Fed. Reg. at 38,312. If the OIG achieves this goal, then both the government and the health care industry will benefit. The health care industry has been seeking such "meaningful advice" on health care fraud and abuse statutes for a number of years.

Despite the OIG's apparent willingness to work with individuals and entities seeking advisory opinions, the decision whether to request an advisory opinion is complicated and requires the assistance of competent health law counsel. Such a decision should be made only after carefully weighing the benefits and risks associated with both a favorable and an unfavorable opinion.