Application of Safe Harbor Exceptions to the Anti-kickback Statute

On August 7, 2025, the Office of the Inspector General (“OIG”) issued Advisory Opinion 25-09 (“Advisory Opinion”) providing a favorable opinion regarding remuneration to physicians with an ownership interest in a medical device manufacturer.

The OIG’s mission “is to provide objective oversight to promote the economy, efficiency, effectiveness, and integrity of HHS programs, as well as the health and welfare of the people they serve.” The OIG enforces Federal fraud and abuse laws including the Anti-Kickback Statute. The OIG recently reported recovering over $170 Million in enforcement actions between October 1, 2024 and March 31, 2025.

The OIG summarizes the Anti-Kickback Statute as

The Advisory Opinion was issued upon the request of a company that “develops, manufactures, and sells medical devices relating to emergency stroke treatment” and “is owned, in part, by physicians … who may order or purchase [the company’s] devices or recommend a hospital order and purchase [the company’s] devices.”

The Advisory Opinion concluded that the arrangement between the company and its physician owners did not generate prohibited renumeration under the Anti-Kickback Statute because the arrangement was covered by Safe Harbor Regulations. The Safe Harbor Regulations can provide exceptions to the Anti-Kickback Statute upon satisfying applicable conditions. For example, the Advisory Opinion relied on the following facts:

• the physician owners (e.g., passive investors that were in a position to make or influence referrals for the company) only comprised approximately 35 percent of the company’s ownership;
• the terms of the investment interests were the same for all passive investors;
• the terms on which an investment interest was offered to a passive investor was unrelated to previous or expected volume of referrals, items or services furnished, or amount of business otherwise generated from that investor to the company;
• there were no requirements or suggestions that passive investors make referrals to, be in a position to make or influence referrals to, furnish items or services to, or otherwise generate business for the company as a condition of remaining as an investor;
• neither the company nor any of its investors marketed or furnished items or services to passive investors differently than to non-investors;
• no more than 40 percent of the company’s gross revenue related to the furnishing of health care items and services in the previous fiscal year or previous 12-month period came from referrals or business otherwise generated from investors;
• neither the company nor any of its investors loaned or guaranteed a loan which may be used by a physician to obtain an investment interest in the company; and
• the company did not made any profit distributions to any of the physician owners and certified that, if it does make such distributions or other payments to investors based on their ownership interests in the company, that the amount of any payment to an investor by the company in return for the investor’s investment interest would be directly proportional to the amount of the capital investment that investor.

Although the Advisory Opinion is limited in scope to the subjects of the opinion, the Advisory Opinion can provide insights into properly structuring arrangements between medical device manufacturers and physician owners or investors to avoid enforcement actions under the Anti-Kickback Statute.

The Advisory Opinion is available here.

Editor: Philip Nelson