Health Law Advisor

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.

On April 13, 2021, a New York-based chiropractor, was sentenced to nine years in prison, and ordered to pay close to $20 million, for running what the federal government alleged was a large scale scheme to defraud Medicare and other third party insurers.[1]   The sentencing stems from a case originally filed under seal on August 29, 2018, in which the U.S. Attorney’s Office for the Southern District of New York alleged that two New York chiropractors – James and Jeffery Spina – improperly owned and controlled multiple medical practices and engaged in submission of fraudulent health care claims from 2011 until September 2017.