U.S Department of Health and Human Services in Washington, D.C. Photo: Michael A. Scarcella/ALM

A charity that provides financial and other assistance to patients with chronic and life-threatening diseases sued the U.S. Department of Health and Human Services this week, claiming the department is violating its First Amendment rights.

In its lawsuit filed in the Eastern District of Virginia, Patient Services Inc. claimed a March 2017 HHS advisory opinion blocks the nonprofit from communicating with donors and potential donors about its patient programs, a move that altered guidance it’s followed for years and severely limits its ability to operate. PSI general counsel Neil Millhiser said the change has contributed to a $17 million drop in the organization’s budget.

“In the end, this is really hurting the patients,” Millhiser said.

An HHS spokeswoman said the agency does not comment on pending litigation. PSI is represented by a team from Sidley Austin that includes Carter Phillips, William Sarraille, Robert Keeling, Jack Pirozzolo and Paul Zidlicky.

The lawsuit comes as the Justice Department has been investigating improper payments by pharmaceutical companies to charities like PSI. The Justice Department secured a guilty plea and millions of dollars from Aegerion Pharmaceuticals in September to resolve criminal charges, including that the company used PSI to illegally pay for patients’ co-pays. PSI faced no allegations of wrongdoing in the investigation.

To help businesses and nonprofits ensure they are not running afoul of fraud provisions including the Anti-Kickback Statute, the Office of the Inspector General at HHS issues advisory opinions. According to its lawsuit, PSI has operated for more than 15 years under an advisory opinion under which the organization promised to provide help to patients without regard to their choice of medication or healthcare provider.

However, in a new modified advisory opinion, PSI alleges HHS barred the organization from communicating with donors, which include pharmaceutical manufacturers, about diseases and treatments for those diseases.

The organization claims in the lawsuit it has no choice but to agree to the advisory opinion because donors often will not participate in the programs without the assurance of such an opinion, and because the organization fears prosecution if it operates outside an advisory opinion.

PSI argues it must engage in communication with certain donors because they have information needed to ensure PSI programs fully cover not only the treatment for a disease, but supplemental needs like transportation or underlying treatments.

The organization says the new opinion bars it from asking donors or their “affiliates” about items including available treatment for diseases, costs of new or evolving treatments and how treatments are administered. PSI also says the opinion is unclear about the definition of “affiliates.”

“It’s a classic chicken and egg scenario, because how can we set these programs up without getting the information?” Millhiser said.

Millhiser said the opinion prevents PSI “from doing our due diligence” and violates the First Amendment because it’s a restriction on speech that is “truthful” and “non-misleading.”

PSI claims the government has failed to narrow the restrictions to meet its interest in prohibiting certain violations of the law.

“[HHS] can’t just introduce draconian limits on speech because of something that might happen. They have that burden of justifying these proposed restrictions,” Millhiser said. “That’s what really goes to the core of this. They are violating our First Amendment rights.”