On June 11, 2025, the Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion No. 25-03 (Opinion), which provided favorable guidance for physician practices seeking to contract with telehealth platforms. Guidance was requested by anonymous PC/MSO affiliates (Requesters) who seek to expand their telehealth network. Specifically, the Requesters sought clarity regarding whether an arrangement (Proposed Arrangement) with telehealth providers (Telehealth Platforms) would trigger sanctions or penalties under the Social Security Act or the federal anti-kickback statute.
The Requesters utilize a PC/MSO model (a common structure among investors in healthcare businesses because it generally complies with state Corporate Practice of Medicine prohibitions) featuring a management services organization that provides administrative services to a physician-owned medical practice (PC) for a fee. Under the Proposed Arrangement, the PC would (i) lease healthcare professionals from the Telehealth Platforms to serve patients of the Telehealth Platforms who are covered by insurance plans that contract with the PC and (ii) pay the Telehealth Platforms an additional fee for certain administrative services. According to Requesters, the Proposed Arrangement helps to fill coverage gaps, particularly in underserved and rural communities that have limited access to insurance-covered telehealth services. Requesters made additional certifications regarding the specifics of the Arrangement, including that all service fees were consistent with market standards, as established by a reputable, independent third-party valuator.
Although OIG determined that the Proposed Arrangement implicated the federal anti-kickback statute because the Telehealth Platforms referred patients to the PC while the PC paid fees to the Telehealth Platforms, it ultimately concluded that the Proposed Arrangement was protected by the statute's safe harbor for personal services and management contracts and outcomes-based payment arrangements. Importantly, OIG noted that the Requesters paid the applicable service fees regardless of whether the PC ever received reimbursement from payors, in OIG's mind decreasing the likelihood that the volume or value of referrals would impact the fees' structure.
OIG practice is to limit the scope of the Opinion to the specific facts presented by the Requestors; however, by allowing these types of arrangements, OIG is encouraging more telehealth services and greater overall access to patients. The Opinion provides a blueprint for how an arrangement with telehealth providers may look without running afoul of federal law.
Investments in healthcare businesses always pose nuanced regulatory and transactional questions. We invite you to learn more about Venable's Healthcare and Private Equity teams.