For immediate release:
January 9, 2018

Contact: Drew Halunen
[email protected]
(202) 716-2204 cell

PSI Files Lawsuit Against U.S. Department of Health and Human Services for Violating Its Free Speech Rights

As the U.S. Government Stifles the Charity’s Ability to Speak With Donors and Potential Donors, Tens of Thousands of Sick and Financially Vulnerable Patients Are Put At Risk

 

MIDLOTHIAN, Va., January 9, 2018 —Patient Services, Inc. (PSI) General Counsel Neil Millhiser announced today that PSI has sued the U.S. Department of Health and Human Services and its Office of the Inspector General (OIG) in federal court in the Eastern District of Virginia for unconstitutionally restricting PSI’s communications with potential and existing donors of the charitable nonprofit.

Founded 28 years ago by its President, Dana Kuhn, Ph.D., PSI is the first charity of its kind in the non-profit patient assistance program sector, which today includes at least eight national charities that assist financially vulnerable patients with severe and chronic diseases. PSI’s services include providing financial assistance to patients to afford health insurance premium and prescription drug treatment co-payments.

Since 2002, the OIG has provided guidance to PSI and other charitable patient assistance programs to prevent donor kickbacks when delivering financial assistance to Medicare and Medicaid beneficiaries. Donors to such charities include disease treatment centers, hospitals and other healthcare facilities, disease-specific charities, medical societies, pharmacies, individuals, state governmental entities, and pharmaceutical companies. The guidance for each charity seeks various safeguards to ensure the charity does not interfere with patient and provider choices of treatments.

However, OIG imposed guidance on PSI in 2017 that was historically never part of the guidance under which it operated for more than a decade. The guidance unconstitutionally prohibits PSI’s protected free speech with donors and potential donors, jeopardizing PSI’s ability to operate and ultimately endangering the lives of patients who need PSI’s assistance.  Under this 2017 guidance, PSI may not ask donors and potential donors for information that only corporate donors would possess about a wide range of issues, including diseases, drugs and patient populations. This information is critical for PSI to know in order to create programs to help patients. PSI alleges that prohibiting its ability to ask donors for and to receive such truthful and non-misleading information violates PSI’s First Amendment rights.

“The OIG’s restrictions on PSI’s communications with donors are unreasonable, unfair and unconstitutional. They damage PSI and threaten the lives of the patients we serve,” Millhiser said. “With the good will of the holidays just behind us, it is tragically ironic that the government would persist in trying to hurt our most vulnerable patient populations. It is time for PSI to stand up and fight for these patients, and that is why we are filing this lawsuit.”

In 2002, PSI proactively approached the OIG to request guidance on operating its charitable model. In response, OIG issued to PSI the first advisory opinion to a charity in this sector, and a subsequent modification to its positive OIG opinion, providing guidelines to ensure that PSI’s model appropriately ensures that patients’ and providers’ choices of treatments are respected without regard to the source of charitable donations.

Throughout its existence, PSI has helped hundreds of thousands of Americans and has done so in compliance with all applicable state and federal laws.  Despite PSI’s history of operating without interfering with the independent prescription decisions of providers and patients, the OIG has acted autocratically and irrationally in placing such unnecessary and burdensome restrictions on PSI.

“OIG’s current guidelines are overbroad, unreasonable and unconstitutional limits on conversations with our donors and potential donors about diseases, treatment options, patient needs, and levels of support necessary to save the lives of financially-vulnerable patients,” Millhiser added. “Charities should not have to live in fear of OIG when we have compliant discussions with donors about the current state of treatment options for patients.”

The speech OIG unconstitutionally seeks to stifle is essential to developing funds that meet urgent needs of patients facing terrible harm if they are not supported in gaining access to the therapies that their providers have selected for them.

The lawsuit seeks relief through a declaratory judgment (as opposed to monetary damages) that would stop the federal government from enforcing rules against PSI that prevent it from receiving certain information from donors and potential donors. The suit specifically alleges that truthful, non-misleading information regarding diseases, treatments, patient needs, and donor support is protected free speech, and that the government can directly prohibit and prevent illegal kickbacks without restricting truthful, non-misleading speech.

A copy of the complaint can be found here. Sidley Austin LLP is leading the litigation for PSI.

Dr. Kuhn founded PSI in 1989 in the wake of tragedy. After sustaining a sports injury in 1983, Dr. Kuhn discovered he had hemophilia and received a factor treatment derived from an infected blood supply that contained HIV and Hepatitis C. There was no test for HIV at the time, and he unwittingly contracted both viruses and passed HIV to his wife, who developed full-blown AIDS and died, leaving him to raise two pre-school aged children alone. While playing a key role to help clean up the U.S. blood supply in the late 1980s and early 1990s, Dr. Kuhn established PSI to support others in financial need who suffer from severe, chronic diseases, sparking the birth of this charitable sector.

About Patient Services, Inc.

Patient Services, Inc. (PSI) is a 501(c)(3) patient-assistance charity that provides more than $100 million in healthcare-related financial assistance each year to the nation’s most vulnerable patient populations.  PSI assists patients who live with specific chronic illnesses or conditions locate suitable health insurance coverage and afford expensive co-payments.  PSI also provides financial assistance to afford premiums associated with COBRAs, state high risk pools, open enrollment, guaranteed issue policies, HIPAA conversion policies, and prescription co-payments associated with private insurance as well as with Medicare Parts B and D. Learn more at www.patientservicesinc.org.

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Fact Sheet for Patient Services Inc. Declaratory Judgment Lawsuit

  1. Details
    • On Monday, January 8, the nonprofit charity Patient Services Inc. (PSI) sued the U.S. Health and Human Services Department (HHS), the HHS Office of Inspector General (OIG), the HHS OIG Daniel Levinson, and Acting HHS Secretary Eric Hargan in the U.S. District Court for the Eastern District of Virginia.
  2. PSI is suing over OIG’s restrictions on PSI’s ability to communicate with PSI donors and potential donors to help patients in violation of the First Amendment. The specific restrictions that PSI is challenging are contained in the 2017 Modified Advisory Opinion that enables PSI to operate:
    • The Charity does not, and will not, solicit suggestions from donors regarding the identification or delineation of disease funds.
    • No donor or affiliate of any donor (including, without limitation, any employee, agent, officer, shareholder, or contractor (including without limitation, any wholesaler, distributor, or pharmacy benefits manager)) directly or indirectly influences or will influence the identification or delineation of any of the Charity’s disease funds.
    • The Charity … will not establish or modify funds for specific diseases at the request or suggestion of donors of prospective donors (or affiliates of donors or prospective donors) that manufacture drugs or devices for the treatment of such diseases or that otherwise have a financial interest in the establishment of modification of such funds.
    • See 2017 Modified Advisory Opinion, p. 6,
  3. Consequently, OIG prohibits PSI from asking donors and potential donors for critical information only the donors have about diseases, drugs and patient populations that are necessary for PSI to help patients.
    • Specifically, PSI is asking the court to allow PSI to ask for and obtain information from donors and potential donors about the following:
      • (i)the number of affected individuals; (ii) the demographics of the patient population; (iii) the cost of the new treatment or drug; (iv) the expected utilization of the drug; (v) coverage and other restrictions that payors are likely to impose, including government payors; (vi) the likely duration of likely therapy; (vii) how and where the drug or treatment will be administered (such as by a doctor in a hospital or by the patient in their own home); (viii) any ancillary patient needs such as transportation services; (ix) assistance for other supportive therapies that may be necessary; (x) the frequency and likelihood of complications or adverse events that can occur as a result of the treatment or drug; (xi) the costs associated with addressing side effects of the drugs or treatments; and (xii) whether any current donors or prospective donors have an interest in supporting this prospective new disease fund through donations.
    • See PSI’s complaint, p.38: https://www.scribd.com/document/368674938/PSI-DJA-Complaint-1-8-2018?secret_password=qkYqLQEsTy5ezC04l7IE.
  4. PSI is asking the court to declare that OIG’s restrictions violate the First Amendment
    • In the lawsuit, PSI requests that the court to declare that the restrictions violate PSI’s constitutional free speech rights and to order the OIG to allow PSI to get the data listed above that it needs from donors and potential donors to help patients.