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Enforcement Edge
January 12, 2022

HHS-OIG Rule Expands Opportunities for Advisory Opinions

Enforcement Edge: Shining Light on Government Enforcement

On January 7, 2022, the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a final rule—to become effective 30 days after its formal publication on January 11—that will significantly expand the kinds of advisory opinions that industry stakeholders can seek from the agency.

Drug and device manufacturers, healthcare providers, and other stakeholders have long been able to request advisory opinions from HHS-OIG about the application of its fraud and abuse authorities to the requesters’ existing or proposed business arrangements. Specifically, these opinions address whether the arrangements could violate the Federal Anti-Kickback Statute or the Beneficiary Inducement Statute, or could constitute grounds for administrative or civil sanctions. The procedural rules in place since 1997 have prohibited OIG from accepting advisory opinion requests or issuing opinions where “the same, or substantially the same, course of action is under investigation, or is or has been the subject of a proceeding involving the Department of Health and Human Services or another governmental agency,” such as the US Department of Justice.

However, under the new final rule, OIG is rescinding this prohibition for two reasons. First, OIG believes that removing this provision will give the agency flexibility in issuing both favorable and unfavorable advisory opinions where arrangements may involve conduct that is the subject of government investigations and proceedings. Second, OIG believes that the rescission will give stakeholders greater transparency about the factors that government enforcement bodies consider when evaluating compliance with fraud and abuse laws, including when distinguishing between facially similar business arrangements.

Notably, OIG announced that, in conjunction with the final rule’s publication in the Federal Register, it plans to publish on its website a new enforcement policy statement. This statement will take the position that if arrangements involve conduct similar to an arrangement currently subject to a government investigation or proceeding, this will “weigh against the issuance of a favorable opinion because such circumstances generally indicate that the arrangement does not present a sufficiently low risk of fraud and abuse.” However, consistent with its current practices, OIG will continue to consider the facts and circumstances of each advisory opinion request and make determinations on the merits.

If you have questions about this rule or OIG’s issuance of advisory opinions, reach out to any of the authors or any of their colleagues in Arnold & Porter’s Life Sciences & Healthcare Regulatory practice.

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.