Obtaining an OIG Advisory Opinion: The General Counsel’s Perspective – Interview of Daniel Orenstein, General Counsel, athenahealth, Inc.

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By Julia R. Hesse

As many of you may know, athena­health, Inc. recently received a fa­vorable Advisory Opinion from the Office of Inspector General (Advis. Op. 11-18, December 7, 2011). Athenahealth is best known for its Internet based practice and revenue cycle management, and electronic health record services. Athenahealth also offers patient communications, and care co­ordination services on the same integrated technology platform. The favorable Advisory Opinion relates to athenahealth’s care co­ordination service. The Advisory Opinion itself has been discussed in the press and also by trade associations like the American Health Lawyers Association, and is interesting in its own right.

The purpose of this interview is not to discuss the substance of the Advisory Opinion, though. In­stead, I recently sat down with Daniel Orenstein, the General Counsel of athenahealth, Inc., to discuss the process of obtaining the Advisory Opinion. The ques­tions are all mine; Daniel provid­ed all answers.

Daniel Orenstein, General Counsel of athenahealth, Inc

Is this is the first Advisory Opin­ion your company had sought?


Who within the organization started the conversation with regard to getting an advisory opinion?

It’s a “chicken and egg” question. I was called into a meeting with the CEO and our head of Business Development, who were discuss­ing this business idea. They knew that it raised some potential anti-kickback issues and they raised the issue of a potential advisory opinion with me because we had already discussed seeking advi­sory opinions in other situations. The anti-kickback analysis was often part of the initial conversa­tion on a major initiative.

 What was different about this project that made you decide to go forward with the Advisory Opinion process?

This was a new planned service offering in the “drawing board” stage and where we had the strategic opportunity to get the security of the opinion. It wasn’t a “must-have” because it is a complimentary service offering – while it was a highly strategic initiative, if we got some nega­tive feedback we could work with it … and the prospect of getting positive feedback outweighed the negative. Also, because it is a new service offering – essen­tially creating a new market for information exchange outside of the usual paradigms – getting an advisory opinion could give us a competitive advantage.

What was the process once you decided to seek an advisory opinion?

Actually, we started influencing the development of the business model so that it would be con­sistent with what we thought the request was going to be – that process began months before we initiated the request and was on­going throughout the time the re­quest was being made. You have to continue to be vigilant about the approach you are taking be­cause the product development concepts are changing all the time. By the time we contacted outside counsel, we were well on the way to internally reinforc­ing the model based on what we thought we would be submitting as the model under the advisory opinion.

Did you have the opportunity to discuss the idea informally with the OIG before the formal request was made?

No. The OIG has a set process where they wanted the written request and then they take some time and ask for more informa­tion. That’s when you kind of get into more of a dialogue. But the OIG is clear; they wanted the initial request in writing. We did explore with outside counsel, though, whether it was possible to withdraw the advisory opinion request if the OIG reacted very negatively to the concept.

Did you have any ability to di­rect your advisory opinion re­quest to a particular person

within OIG (i.e., someone who may have been known in the community as being more fo­cused on Health IT issues)?

No. We were assigned an attor­ney who turned out to be very engaged and very good and easy to work with and responsive. We were very concerned, though, when we got the OIG’s initial re­quest for additional information, because the tone of the request seemed to indicate that maybe there were some things about the model that they didn’t un­derstand, or we didn’t commu­nicate adequately enough. But when we started engaging with the OIG about their questions, we got through that and the OIG felt that we were able to respond ad­equately.

Did you send all of your informa­tion to the OIG only in writing? Or did you have an opportunity to present the vision of the proj­ect to them, either in person or over the phone?

We didn’t do any communications directly. All of the communica­tions were through our outside counsel. We suggested meeting in person as a possibility and we would have done that. The OIG wanted our first response in writ­ing; we offered to do a “demo” of the product but the OIG decided they did not need a demo. We did provide some charts and graphi­cal representations of what we were doing as exhibits that I think were very helpful. In one of the rounds of responses we tried to make it simpler and easier to un­derstand than some of the narra­tive that we had given previously.

How many rounds of back-and-forth did you have with the OIG?

We received two requests for ad­ditional information, and there were a couple of questions which we answered verbally. We also had to submit a factual certifica­tion at the end prior to issuance of the opinion, and there was a round of back-and-forth on the factual certification.

Did some of their requests for information make it clear that perhaps they didn’t understand the model in the way that you would want to present it? Were you surprised at all by the con­tent or the depth of their re­quests for information?

The OIG’s requests were pretty much what we anticipated. We knew we would get some ques­tions and we would probably have a little work to do to respond. The OIG had a lot of questions around the economic model. I think they were correct to push us on that, because we hadn’t articulated it as clearly as we should have and it forced us to go back and spend some significant time internally. We revised the pricing model to make it simpler. I, personally, was on a crusade to make the model simpler. We needed to make the pricing model simpler – not only for the OIG, but we needed to make it simpler for the market to understand this. If we can’t com­municate it adequately to a so­phisticated government agency, just think about communicating it to a two or three doctor practice that doesn’t have a lot of time. I think that was probably the most salutary part of the process. We actually got to a simpler econom­ic model out of the process.

How long did the advisory opin­ion process take? And how long did you think it was going to take?

We submitted it in May or June (of 2011) and we had the opinion in December. I was pleased that we had it within the year. The OIG responded very quickly, as compared to a number of other agencies that we work with. Also, some of that time was spent on our side, with internal process­ing of responses back and forth. The OIG responded efficiently – which is great because pressure started mounting towards the end of the year to roll the service offering in general availability at the beginning of 2012. I was a little surprised that the OIG was so responsive. I had the “Plan B” starting to formulate just in case we didn’t have the Advisory Opinion in hand before that sales meeting in February.

When you think about it from the OIG’s perspective, though, they must love getting the advi­sory opinion requests because that’s where they get to do the big policy-level thinking, right?

Yes. When we received the work product back from the law firm, we felt it needed more of the policy argument in it because we wanted to appeal to that bigger picture thinking. We think there are some really strong public policy arguments in favor of this model because it facilitates care coordination. There are a lot of folks in the government who are interested in that now because of the challenges with making health exchange work properly. So, we worked to include the pub­lic policy argument and I think, at the end of the day, that was an important factor in the decision making.

I can see why you would want to put the request in context and explain not only why it mat­ters for the business, but also who it benefits and why?

That actually took a little while to communicate to our law firm.

The challenge from the out­side lawyers’ perspective is always that we never know your business as well as you do and therefore we can’t di­vine the public policy piece as well as the business can.

That’s right. There were a couple of points in time where I think it was appropriate that we took over a bunch of the drafting and a bunch of the processing. For example, we were really best po­sitioned to work on the economic model internally, and we were probably best positioned to craft the policy arguments.

Were there any unanticipated “hiccups” along the way that, in hindsight, you would think might be part of any advisory opinion process?

The OIG’s initial response back to us was a little bit of a shock. In some ways it was encourag­ing; but in some ways it took you aback to see how much they were getting into everything and ques­tioning some of what you were do­ing. On the other hand, we were pleasantly surprised about the OIG’s responsiveness.


Julia R. Hesse is a partner in the Healthcare Group of Choate, Hall & Stewart LLP and formerly prac­ticed as Associate General Counsel at Tufts Medi­cal Center, Inc. and as an associate in the Health Care practice group of Ropes & Gray LLP. Julia’s practice focuses on the full range of health care-related regulatory issues and other business and transactional matters important to hospitals, aca­demic medical centers and affiliated faculty and community physicians, including the implementa­tion of quality-related programs and systems, ne­gotiating and implementing managed care agree­ments that tie reimbursement to the achievement of quality goals, and advising health care insti­tutions and faculty practice plans on the devel­opment and implementation of compensation systems that reward the achievement of quality-related goals. She is a graduate of Williams Col­lege and the University of Pennsylvania, where she received degrees in both law and bioethics.