OIG Offers New Advisory Opinion Options—But Should You Use Them?

Getting the HHS Office of Inspector General (OIG) to issue an advisory opinion confirming the legality of potentially kickback-troublesome business arrangements that your lab is considering will be easier thanks to a new federal rule. Here’s a quick briefing of the new rule, which takes effect on February 10, 2022, and how it can help your lab avoid kickback liability.

The significance of OIG advisory opinions

It’s a common scenario that just about all labs and compliance managers face. You want to enter into a lease, service contract, or other business arrangement with a physician, hospital, or other provider. The problem is that the prospective partner also refers (or soon will refer) patients to your lab. To the extent the proposed arrangement involves payment or other form of remuneration, you’re concerned—and rightly so—of exposing your lab to penalties under the federal Anti-Kickback Statute (AKS) and other fraud laws. One way to allay these concerns is to ask the OIG for an advisory opinion confirming the legality of the proposed arrangement. While technically non-binding, advisory opinions offer direct and specific guidance on where the OIG draws the lines, enabling you to make legally sound judgments about whether to proceed with the deal.

The bar on advisory opinions for currently pending issues

There’s one big caveat that limits the use of advisory opinions: the agency won’t provide an advisory opinion if the proposed deal or “course of action” is the same or substantially the same as one currently under investigation or being litigated in a federal whistleblower lawsuit that’s still pending. Although you can get an advisory opinion after the investigation or lawsuit is resolved, that often takes years, by which time the opportunity to proceed with the deal has long passed. But now the OIG is eliminating the bar. The announcement came in the form of a new final rule published in the January 11, 2022 edition of the Federal Register. As of February 10, 2022, labs and other entities may request an advisory opinion, even if the requested course of action is the same or substantially the same as one under investigation or is the subject of a proceeding involving a governmental agency.

Impact on your lab: Should you or shouldn’t you seek an OIG opinion?

Just because you can now get an OIG advisory opinion seeking confirmation of a deal subject to pending investigation or litigation doesn’t necessarily mean that you should. If you do so, your chances of getting the favorable opinion you’re looking for will decrease. As the final rule notes, the mere fact that a course of action is the subject of a qui tam case or under investigation “will weigh against the issuance of a favorable advisory opinion because such circumstances generally indicate that the arrangement does not present a sufficiently low risk of fraud and abuse.” On the other hand, the pending action might actually have the reverse effect and improve your odds of getting a favorable opinion. That would be the case if the proposed arrangement is the subject of a False Claims Act qui tam case that the US Department of Justice has declined to pursue. In turn, the issuance of a favorable advisory opinion, should you get it, may also help persuade a federal judge that the whistleblower’s case lacks merit and dismiss it altogether. Bottom Line: You need to consult your attorney on the risks and benefits of taking advantage of the new rule allowing you to seek advisory opinions on matters currently under investigation or at the center of a pending whistleblower lawsuit.