On June 17, 2024, the Department of Health and Human Services Office of Inspector General (OIG) issued an advisory opinion, approving a plan to provide assistance with travel, lodging, meals, and other associated expenses for qualifying patients receiving a gene therapy product.

OIG determined that it would exercise its enforcement discretion by declining to impose administrative sanctions on gene therapy product manufacturer under the Federal Anti-kickback Statute (AKS), despite finding that the arrangement would generate prohibited remuneration if the requisite intent were present. Additionally, OIG found that the arrangement satisfies the “Promote Access to Care” Exception to the Beneficiary Inducements Civil Monetary Penalties law.

Factual Background

The U.S. Food and Drug Administration (“FDA”) has approved the manufacturer’s gene therapy product for two different conditions for patients 12 and older. The gene therapy product is “a one-time, potentially curative treatment” for both conditions and must be prescribed and administered at an approved treatment center. Currently, the manufacturer plans to activate 50 treatment centers, which must pass a quality audit. The manufacturer’s website contains a treatment center lookup tool that provides the patient with the three nearest treatment centers based on the zip code provided; the lookup tool does not take into account the number of patients that have received the product at a treatment center or the volume or value of referrals to or from a treatment center. 

The gene therapy product is created specifically for each patient using the patient’s own blood stem cells, which are mobilized and collected over an approximately one-week period at the treatment center. Further, the patient must stay at the treatment center for 4-6 weeks after infusion of the product due to serious potential complications that can occur.

The manufacturer offers travel, lodging, meals and other related expense assistance to patients who are U.S. residents (or residents of a U.S. territory), whose income is at or below 600% of the Federal Poverty Level, and who do not have any other similar expense assistance through their insurer, the treatment center, or a third-party charity.

The expense assistance includes round-trip economy airfare for patients and caregivers who live 300 miles or more away from the nearest treatment center and ground transportation for patients and caregivers who live between 100 and 300 miles away from the nearest treatment center. It also includes one modest hotel room, up to $50 per person per day for meals, and up to $50 per day total for expenses related to parking, taxis, ride-shares, and gas to patients and caregivers, who live more than 100 miles away from the nearest treatment center. The above-described expenses are provided to a patient and one caregiver for patients 26 years old and older and to a patient and two caregivers for patients under 26 years of age. The manufacturer reimburses the above expenses after going through an expense verification process. This arrangement is intended to allow caregivers to remain near the patient while they stay at the treatment center the required length of time. Research has indicated that having a caregiver present for similar types of treatments can positively impact patient outcomes.


Although OIG found that the arrangement constitutes potentially prohibited remuneration under the AKS to which no safe harbor applies, OIG explained it would not impose administrative sanctions for the following reasons:

  • The arrangement facilitates access to medically necessary care that patients may not otherwise be able to receive.
  • The arrangement enables the patient to stay at the treatment center for the required, extended time period by allowing caregivers to remain near the patient.
  • The gene-therapy product is “a one-time, potentially curative treatment” that is not likely to lead to additional referrals that would inappropriately increase federal health care program costs.
  • The manufacturer has employed additional safeguards to lessen the risk of fraud and abuse such as not authorizing expense reimbursement for any expenses covered by insurance, the treatment center, or a third-party charity, not requiring treating physicians or treatment centers to use the gene therapy product exclusively, and will not use the expense reimbursement arrangement as a marketing tool. (Where only partial expense support is provided by these other entities, the manufacturer will only cover items not covered by these other entities.)

Additionally, OIG found that the arrangement qualifies for the “Promotes Access to Care” Exception under the Beneficiary Inducement CMP because (1) there are potential barriers to accessing the gene therapy product; and (2) the arrangement presents a low risk of harm to the Medicare and Medicaid programs and their beneficiaries. The opinion notes that there are a limited number of qualified treatment centers that can administer the product and that the treatment requires an extended hospital stay. The opinion explains that the arrangement increases patient safety by facilitating the extended hospital stay to monitor for severe potential complications and is not likely to cause improper utilization since the gene therapy product is “a one-time, potentially curative treatment.”


OIG’s favorable opinion appears to place emphasis on the “one-time” and “potentially curative” nature of the gene therapy product in finding that the expense reimbursement arrangement poses a low risk for potential fraud and abuse. Additionally, the opinion focuses on the extended hospital stay required of the patient and the better outcomes a patient may experience with a caregiver present during this time. Like all OIG advisory opinions, this opinion is only applicable to this particular situation and requestor.

Reed Smith will continue to follow developments in health care fraud and abuse enforcement. For more information on this advisory opinion or the impact of the OIG’s guidance on your business, please contact the author or a member of the Reed Smith health care team.