Advisory Opinion 98-6, issued by the OIG on May 1, 1998, addressed the waiver of copayments and deductibles for participants in a clinical study sponsored by HCFA and the National Heart, Lung, and Blood Institute (NHLBI), which is part of the National Institutes of Health (NIH). Based on the information provided in the request, the OIG concluded that waiving copayments and deductibles did not constitute grounds for imposition of sanctions under the antikickback statute, 42 U.S.C. § 1320a-7b(b), or the civil monetary penalty provisions at 42 U.S.C. § 1320a-7a(a)(5).

As background, the OIG observed that HCFA issued a nonreimbursement policy for Lung Volume Reduction Surgery (LVRS) for the treatment of emphysema in 1995 because of a lack of medical evidence supporting the effectiveness of LVRS. That same year, HCFA requested a technology assessment of LVRS from the Center for Health Care Technology (CHCT) within the Agency for Health Care Policy Research. CHCT found that available data did not permit a scientifically defensible conclusion about the risks and benefits of LVRS and suggested that a clinical trial was ethically and scientifically supported. In response to CHCT's recommendations, HCFA and NHLBI developed the National Emphysema Treatment Trial (NETT).

NETT is a multicenter, randomized clinical trial conducted to compare the relative benefits and risks of medical therapy alone versus medical therapy plus LVRS for the treatment of moderate to severe emphysema. Over a 54-month period, 4,700 patients will be involved in NETT. To participate in NETT, patients must be Medicare beneficiaries or have other health insurance. Under the NETT protocol, one group of patients will receive medical management and pulmonary rehabilitation. The medical management will be provided by the patient's primary care physician, although NETT physicians will evaluate patients to ensure that NETT treatment standards are being met. The pulmonary rehabilitation will be provided at NETT centers and other "satellite" rehabilitation centers. The second group of patients will receive surgical treatment performed by NETT physicians at NETT centers. HCFA hopes to use the results of NETT to determine whether and under what circumstances LVRS should be considered reasonable and necessary treatment and, thus, covered by Medicare.

Although LVRS is not a Medicare covered service, HCFA has agreed to reimburse NETT clinical center contractors and other designated providers for patient care services, including LVRS, required under the NETT protocol. The NETT contractors are seeking to waive copayments and deductibles for items and services within the scope of the NETT protocol that are covered under Medicare Part B. The NETT contractors argue that waiving copayments and deductibles will encourage patients to comply with the NETT protocols and, thereby, enhance the reliability of the study. The NETT contractors note that patients normally do not pay to participate in research studies.

The OIG observed that the antikickback statute, 42 U.S.C. § 1320a-7b(b), prohibits payments made purposefully to induce referrals for which payment may be made by a federal health care program. The OIG also noted that the civil monetary penalty provisions at 42 U.S.C. § 1320a-7a(a)(5) prohibit any person from offering remuneration, including waiver of copayments or deductibles, to a beneficiary of a federal health care program if the person knows or should know the offer is likely to influence the beneficiary to order or receive covered services from a particular provider or supplier. Finally, the OIG reiterated that a 1994 Special Fraud Alert warned providers that routine waivers of Medicare copayments and deductibles may violate the antikickback statute. The OIG emphasized that although the Special Fraud Alert was addressed to providers paid under a charge-based system, it did not legitimize routine waivers by providers paid under prospective payment or cost-basis systems.

The OIG found that the routine waivers of copayments and deductibles without regard to financial hardship under the proposed arrangement implicated the antikickback statute. However, the OIG concluded that under the specific facts of the proposed arrangement, sanctions would not be appropriate under either the antikickback statute or the civil monetary penalty provisions.

In reaching its conclusion, the OIG indicated that three factors adequately protected the arrangement from the risk of fraud and abuse. First, the waivers of copayments and deductibles are not likely to influence beneficiaries to obtain Medicare covered services. Medicare beneficiaries will enroll in NETT because it is the only means of obtaining Medicare coverage for LVRS. Moreover, the goal of the waivers is to induce participation in a scientific study, not to induce utilization of Medicare covered services. Second, the waivers will not increase the risk of overutilization of Medicare covered services. The NETT protocol controls utilization of services and the number of patients is limited to 4,700 over a 54-month period. Finally, the waivers are a reasonable means of enhancing the likelihood of NETT's success. HCFA has decided that a study of LVRS is needed to evaluate its efficacy and cost-effectiveness and to determine if it should be covered by Medicare as a reasonable and necessary service. If patients have to pay to participate in the study, they may be less likely to participate fully throughout the duration of the study.

In addition to the general limitations set forth in its previous advisory opinions, the OIG limited the applicability of Advisory Opinion 98-6 to the parties listed on the redacted distribution list, even though NHLBI stated that the identities of the facilities and individuals participating in NETT are expected to change over the course of the 54-month study.