OIG gives the green light to another innovative warranty

Last week, the Department of Health and Human Services Office of Inspector General (OIG) published Advisory Opinion No. 18-10, advising that the OIG would not pursue an enforcement action under the Anti-Kickback Statute (AKS) based on a warranty offered by the manufacturer of a suite of products used in joint replacement surgeries.

Together with Advisory Opinion No. 17-03, issued last August, the new advisory opinion seems to signal that the OIG will not stand in the way of value-based pricing arrangements that offer clear benefits to both patients and the health care system. For manufacturers considering innovative warranties or similar outcomes-based arrangements, these opinions offer a window into the OIG's thinking about what factors distinguish acceptable from unacceptable arrangements. The advisory opinions also are consistent with statements from OIG leadership at the American Health Lawyers Association annual meeting in June and with the OIG's recent request for information (RFI) asking stakeholders how to protect value-based arrangements from enforcement under the AKS and other fraud and abuse laws, which we summarized here. Manufacturers exploring such arrangements should consider commenting on the RFI.

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