On July 1, 2025, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued Advisory Opinion No. 25-08, concluding that a medical device manufacturer’s proposed payment to access a third-party billing portal used by some of its customers could implicate the federal anti-kickback statute. The OIG issued an unfavorable opinion, finding that the arrangement—if undertaken with improper intent—could result in civil monetary penalties (CMPs) and exclusion from federal healthcare programs.
The requestor was a medical device company that supplies “bill-only” surgical products to hospitals, health systems, and ambulatory surgery centers. These devices are not routinely stocked but are provided for specific surgical procedures. Some customers use a third-party software vendor’s Bill-Only Portal to manage purchases. These customers began requiring the requestor to use this portal and pay annual fees (about $395 per representative/user). The requestor estimated annual costs of up to $1.2 million if all required representatives used the system.
The requestor certified that it receives no direct benefit from the portal, which duplicates its existing billing infrastructure. The only reason it would enter the arrangement is to retain or expand business with customers that mandate use of the portal.
The federal anti-kickback statute (42 U.S.C. § 1320a-7b(b)) prohibits knowingly and willfully offering or paying anything of value to induce the purchase or referral of items or services reimbursable by a federal healthcare program.
Although certain safe harbors exist—such as for personal services and management contracts—they apply only when all regulatory criteria are strictly satisfied. In this case, the requestor could not certify that the portal services were commercially reasonable or necessary.
The OIG essentially determined that (i) the proposed payments to the vendor may constitute remuneration to induce purchases of devices that may be reimbursable by federal programs; (ii) the safe harbor for personal services arrangements does not apply because the services offered are redundant and not commercially reasonable; (iii) the portal’s primary benefits accrue to the customers, not to the requestor, and payments by the requestor could improperly influence purchasing decisions; and (iv) the arrangement could result in anti-competitive market distortion by favoring vendors willing to subsidize the software costs associated with customer purchasing processes.
Notably, one customer had already removed the requestor from its preferred vendor list for bill-only products because of its refusal to pay the vendor, and later issued a competitive RFP. The requestor acknowledged it would proceed with the payments solely to retain and gain business with such customers.
As a result of its analysis and review, the OIG concluded that the proposed arrangement (as defined in the opinion) would generate prohibited remuneration under the federal anti-kickback statute if the requisite intent to induce referrals or purchases were present. As a result, the requestor could face sanctions, including CMPs and exclusion from participation in Medicare, Medicaid, and other federal healthcare programs.
This unfavorable opinion serves as a caution to providers, suppliers, and manufacturers. The OIG clearly stated in the opinion its concern about payments for “access” to patient referrals. Moreover, the facts presented did not involve per-patient or volume or value-type arrangements. Payments to third parties that facilitate provider purchasing decisions must be carefully evaluated, particularly when they confer indirect benefits on referral sources without legitimate, commercially reasonable value to the payor.
Providers, suppliers, and manufacturers should (i) avoid engaging in or continuing arrangements that may be perceived as offering financial inducements to referral sources; (ii) carefully document and substantiate the commercial reasonableness of any services for which a fee is paid, and (iii) conduct internal reviews of vendor relationships that touch on customer procurement or billing activities.
Positioned at the intersection of healthcare, law, and business, the Venable Healthcare team helps our clients understand emerging law and regulation, manage compliance, and anticipate trends, empowering them to advance their goals while mitigating risk.