On July 7, 2025, the Office of Inspector General (“OIG”) for the Department of Health and Human Services published Advisory Opinion 25-08 (“AO 25-08”), an unfavorable and strongly worded opinion interpreting the “arranging for” language in the Anti-Kickback Statute (“AKS”).

The AO involves a proposed arrangement for a medical device company (the “Requestor”) to pay a third-party vendor to access an electronic billing portal operated by the vendor that is used by some of the Requestor’s customers for certain billing operations. In issuing the unfavorable opinion, the OIG said the proposed arrangement “presents anti-competitive risks and risks of inappropriate steering” and characterized the arrangement as being “for the purpose of accessing referrals” from hospital customers that are clients of the vendor.

The Requestor in this AO is a medical device company that supplies "bill-only" products to hospitals. “Bill-only” products are items that are not part of a hospital’s regularly purchased inventory but rather are purchased in real time, such as when a surgeon is selecting the right size or component of a device to use during a surgery. According to the AO, what typically happens with “bill-only” products is that a representative of the medical device company delivers a selection of items to a hospital customer the day before or the day of a patient’s procedure so that the surgeon can select the specific items needed for that specific patient. Some of these “bill-only” items are used in procedures reimbursable by federal health care programs.

In the arrangement at issue in the AO, as a condition of doing business with certain hospitals, the Requestor was required to access a vendor’s electronic billing portal in order to process payment for “bill-only” items for those hospitals rather than using the Requestor’s own billing process. According to the AO, the vendor charges $395/year for each representative of Requestor who needs to use the portal, which the Requestor certified could be as many as 3,000 representatives (amounting to about $1.2 million in annual fees) if each of its representatives had at least one hospital customer who required use of the portal to submit “bill-only” invoices to the hospital. The Requestor certified to the OIG that this billing portal was redundant of its own internal billing processes and provided no additional, appreciable benefits to Requestor. Accordingly, the Requestor told the OIG that it could not certify to the OIG that the fees were commercially reasonable. The Requestor also told the OIG that it would pay the vendor’s fees for one reason: to access the “bill-only” portal in order to sell medical devices to hospital customers that chose to use the vendor and that request or require, as a condition of doing business, that the Requestor use the portal.

The AKS prohibits:

the knowing and willful offering or paying of any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, to any person to induce such person—

to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a federal health care program, or

to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a federal health care program,

The OIG concluded that the proposed arrangement did implicate the AKS because:

• The Requestor would pay the vendor fees to use the portal through which the vendor would arrange for hospital customers’ purchases of the Requestor’s “bill-only” items used in procedures, some of which may be reimbursable by federal health care programs; and
• The Requestor’s use of the portal and corresponding payments to the vendor, which would enable the hospitals to use the vendor to purchase “bill-only” items from Requestor, may result in cost savings (i.e., financial benefit) to the hospitals, and thus Requestor’s payments to the vendor may constitute remuneration to the hospitals to induce the purchase of medical devices that may be reimbursable by a federal health care program.

The OIG found that no safe harbor applied to the proposed arrangement, specifically noting that it would not meet the personal services safe harbor, 42 C.F.R. § 1001.952(d), because the Requestor could not certify that the aggregate services to be contracted for would not exceed those which are reasonably necessary to accomplish the commercially reasonable business purpose of the service, particularly since Requestor has its own well-established accounts receivable process and staff to ensure that customers receive and pay invoices and did not need to use the portal.

At its base, the proposed arrangement would be for Requestor to pay substantial fees to access the portal “as part of an effort to retain and potentially expand business” from hospitals that are clients of the vendor. The fees were essentially access fees by which Requestor would pay the vendor to arrange for hospital customers to purchase the “bill-only” items from Requestor. In citing the anti-competitive and steering risks of the proposed arrangement, the OIG noted that the payments that the Requestor would make to the vendor under the proposed arrangement “could inappropriately steer [c]ustomers to Requestor over Requestor’s competitors that are not able or willing to pay those fees.”

AO 25-08 is an interesting read, as the Requestor was clearly not advocating for approval of the proposed arrangement and instead seemed to be seeking an unfavorable opinion that could be used against the vendor and its hospital customers who were trying to force the arrangement and its fees on Requestor.

The OIG's conclusion in AO 25-08 aligns with its reasoning in another recent unfavorable OIG opinion, AO 25-04. In AO 25-04, the OIG found the proposal by a medical device company to cover the costs for its customers - hospitals, health systems, and ambulatory surgery centers - to have a third-party company screen and monitor the company for exclusion from federal healthcare programs would potentially generate prohibited remuneration under the AKS because the company would be paying for the costs associated with the exclusion screening and monitoring that its customers would otherwise incur. As in AO 25-08, the proposed arrangement in AO 25-04 stemmed from customers of the medical device company requesting or requiring, as a condition of doing business, that the company use a specific vendor for the exclusion screening.