OIG Issues Advisory Opinion on Manufacturer-Subsidized Patient Reminder Program

June 13, 2011

By Peter M. Jaensch & Alan M. Kirschenbaum

The Office of the Inspector General (“OIG”) of the Department of Health and Human Services has issued a favorable Advisory Opinion on a manufacturer-sponsored patient reminder program for a vaccine, concluding that OIG will not seek penalties under the Federal health care program antikickback law.  The reminder program relates to two vaccines marketed by an unnamed pharmaceutical manufacturer.  The original vaccine was approved in 2000 for the immunization of infants and toddlers against pneumococcal bacterial infection.  In 2010, the manufacturer introduced an expanded vaccine that treats all of the bacterial strains covered by the original vaccine plus additional ones.  Like the original, the expanded vaccine is the only FDA-approved pneumococcal conjugate vaccine for children six weeks to five years old, and except where contra-indicated, the expanded vaccine is universally recommended.  The expanded vaccine is recommended for children who have never received the vaccine.  For children who completed the original vaccine course, one supplemental dose of the expanded vaccine is recommended.

To promote completion of the vaccine course, the vaccine manufacturer offers healthcare insurers and providers a cost-free service to remind the parents of children receiving the vaccine to make appointments for their next or supplemental doses.  Children are only eligible for reminders if they have either (1) received at least one dose of the vaccine, but not completed the full course, or (2) completed the course of the original vaccine, but not received the supplemental dose.  Insurers and providers may receive these reminder services either from the manufacturer or from a third-party contractor retained by the manufacturer.  In either case, the service is cost-free to the insurer or provider.  The reminders are delivered either by postcard or automated telephone call, or both. 

The Advisory Opinion notes that these reminders do not mention any specific product, nor do they direct the patient’s parent to any particular healthcare provider.  Instead, they alert parents that their children may have “missed a vaccine shot,” or, in the case of the supplemental dose, “not received a recommended vaccine,” and they advise parents to contact the child’s health care provider to find out if an appointment should be scheduled.  All communications disclose that the manufacturer has provided financial support for the reminders.

In its analysis, the OIG first repeats its long-standing position that free goods or services provided to potential referral sources may constitute prohibited remuneration under the antikickback law.  The OIG notes that the reminder program confers an economic benefit on providers by relieving them of an expense they would otherwise incur and by encouraging parents to arrange a visit with the provider for administration of the vaccine to the child.  Nevertheless, the OIG concludes that the program does not present a case for enforcement, enumerating several reasons: 

  1. There is “little opportunity to influence referrals,” because reminders are sent only to the parents of children who have already been prescribed and received at least one dose of the vaccine. 
  2. The financial support of the vaccine manufacturer is disclosed to the parents.
  3. The manufacturer offers the Program to all health insurers and healthcare providers equally, rather than “target[ing] any particular referral source.”
  4. The administration of the expanded vaccine is the standard of care and universally recommended except where contra-indicated.  Thus, the reminder program will not likely result in overutilization.
  5. The reminders do not recommend a specific vaccine, and therefore are unlikely to decrease patient freedom of choice or result in unfair competition.
  6. The reminder program increases the quality of healthcare services.

Manufacturer-subsidized reminder programs are widespread in the industry and take a variety of forms.  The most common is the prescription refill reminder program, where manufacturers pay a service fee to a chain pharmacy to distribute reminders to the pharmacy’s patients when it is time to refill the manufacturer’s drug.  Reminder programs must be structured carefully because they may implicate not only the antikickback law, but also patient privacy laws and consumer protection laws.  (We have reported on the status of subsidized communications to patients under the HIPAA privacy provisions.)  With regard to the antikickback law, it is encouraging that the OIG has recognized that these programs have a public health benefit and may be structured in a non-abusive, transparent manner that does not influence any treatment decisions.