OIG Clarifies Safe Harbor Compliance in Anti-Kickback Violations Advisory

An article by Sarah Lyness and Meghan Currie of Fox Rothschild discusses Advisory Opinion 25-09, in which the US Office of Inspector General (OIG) reviewed whether a medical device company partly owned by physicians could face sanctions for anti-kickback violations under federal statutes. 

The company, which develops and sells emergency stroke treatment devices, sought OIG’s guidance because about 35% of its ownership group consisted of physician-investors who could potentially influence hospital purchasing decisions.

The OIG conducted a detailed analysis of the company’s ownership and investment structure under the Small Entity Investment safe harbor, which includes eight stringent requirements. These cover limits on referral-based ownership, identical investment terms for all investors, proportional profit distributions, and prohibitions on referral-linked benefits. After confirming that the company met all the criteria, the OIG determined that the arrangement did not involve prohibited remuneration and therefore did not warrant sanctions.

Lyness and Currie note that OIG still views such physician-investor models as inherently risky and conducts fact-specific inquiries into any signs of preferential treatment or financial irregularities. However, in this case, the agency found no red flags, only full compliance.

Maintaining strict adherence to every element of the applicable safe harbor is essential to avoid anti-kickback violations. Organizations should continuously monitor ownership structures, document compliance controls, and conduct regular training to sustain protection under federal law.