March 2026 Legal Intelligencer article by Lamb McErlane attorneys Vasilios J. Kalogredis, Esq. and Sonal Parekh, Esq.

The HHS Office of Inspector General (“OIG”) issued Advisory Opinion No. 26-02 (“Opinion”) on February 12, 2026 regarding a “Requestor’s” proposed arrangement to operate a clinical laboratory that would provide services to patients of affiliated urgent care centers managed by the Requestor (the “Arrangement”). The Requestor sought guidance on whether the Arrangement would constitute grounds for sanctions under Sections 1128(b)(7) or 1128A(a)(7) of the Social Security Act (“SSA”) as those sections relate to the Federal Anti-Kickback Statute[1] (“AKS”).

In contrast to many advisory opinions where the OIG evaluates whether remuneration exists but poses sufficiently low risk, here the OIG concluded that the Arrangement does not generate remuneration at all under AKS. Accordingly, the OIG issued a favorable opinion, reinforcing a critical compliance principle: where no remuneration flows, directly or indirectly, to referral sources, the AKS is not implicated.

Factual Background

Requestor is a management entity affiliated with four urgent care centers, which are operated through various management companies and an affiliated professional corporation. Pursuant to a permissible structure under the applicable State corporate practice of medicine doctrine (“CPOM”) restrictions, Requestor does not own the professional entity but rather provides management and oversight services and maintains ownership interests in the management entities associated with each urgent care center.

Under the Arrangement, Requestor would establish and operate a separately owned clinical laboratory (the “Lab”). Requestor provided that the Lab would: (i) be physically separate from the urgent care centers; (ii) directly bill payors, including Federal health care programs; (iii) not bill the urgent care centers for services; and (iv) be owned by Requestor, but not by any referral sources. Additionally, Requestor certified that several safeguards would be put in place, as set forth below.

1. No Referral-Based Compensation – No compensation to urgent care providers or staff would be tied to the volume or value of laboratory services ordered.
2. No Remuneration Flow – No payments, distributions, or other remuneration would flow from the Lab to the urgent care centers or their providers.
3. Patient Choice Preserved – Patients would receive written notice of the affiliation and retain the ability to select alternative laboratories.
4. No Steering Mechanisms – The electronic health record system would not preferentially direct orders to the Lab.
5. No Referral Tracking – Requestor would not monitor or incentivize referral patterns.
6. Payor Coverage – The Lab would only accept specimens for testing when consistent with payor contracts and the patient’s insurance coverage.

Additionally, the Lab would not place personnel (e.g., phlebotomists) at the urgent care centers, and all specimen collection would occur as part of routine clinical care.

The Law

The AKS[2] makes it “a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce, or in return for, the referral of an individual to a person for… any item or service reimbursable under a Federal health care program.” The prohibition extends to remuneration to induce, or in return for, the purchasing, leasing, or ordering of, or arranging for or recommending the purchasing, leasing, or ordering of, any good, facility, service, or item reimbursable by a Federal health care program. Here, remuneration includes the transfer of anything of value. The statute applies to any arrangement where at least one purpose of the remuneration is to induce referrals for items or services reimbursable by a Federal health care program. Violations of the AKS constitute a felony punishable by a maximum fine of $100,000 and/or up to 10 years of jail time, as well as exclusion from Federal health care programs and potential imposition of fines by the OIG.

Unlike many AKS analyses, which focus on whether an arrangement fits within a safe harbor, the threshold question at hand was more fundamental: Does the Arrangement involve remuneration at all?

Legal Analysis

1. Absence of Remuneration as a Determinative Factor

The OIG’s analysis turned on a straightforward but often overlooked principle: without remuneration, there can be no AKS violation. Here, the Requestor certified that:

1. No payments, benefits or transfers of value would flow to referral sources;
2. No compensation structures would reward ordering behavior; and
3. No indirect remuneration (e.g., free staffing, equipment, or disguised financial benefits) would be provided.

Based on these facts, the OIG concluded that the AKS would not be implicated at all because no remuneration would be paid to any individual or entity to induce the referrals of specimens to the Lab for testing. Because this Arrangement lacked the essential element of remuneration, it was distinguished from several arrangements in prior OIG advisory opinions where remuneration existed but was evaluated under a “low risk” framework.

1. Structural Separation, Corporate Integrity, and Patient Choice

The OIG emphasized the importance of organizational separation between the Lab (i.e., the revenue-generating entity) and the urgent care centers (i.e., the referral sources). Although Requestor maintained ownership of both management entities and the Lab, the absence of financial flows tied to referrals mitigated concerns regarding improper integration. This structure aligns with longstanding OIG concerns about management companies using laboratories to funnel kickbacks, and affiliated entities disguising remuneration through shared ownership or contractual arrangements.

Additionally, the Arrangement incorporated safeguards to preserve clinical independence and patient autonomy, including written disclosure of the affiliation; freedom to select alternative laboratories; and neutral EHR functionality without default ordering preferences. These features reduced the risk of improper steering, overutilization, and distortion of clinical judgment.

Importantly, the OIG cautioned that similar arrangements could implicate the AKS if remuneration were introduced in any form. The Opinion specifically identifies high-risk practices including sham investment opportunities; sham consulting agreements; and provision of free personnel or equipment. Such arrangements may constitute disguised kickbacks and trigger AKS liability if intent is present.

1. OIG Analysis Takeaways

Consistent with prior advisory opinions, the OIG reaffirmed several key compliance principles, as set forth below.

1. The Threshold Inquiry Matters. Before analyzing safe harbors or risk mitigation, parties must determine whether remuneration exists at all. If none exist, the AKS is not implicated.
2. Ownership Alone Does Not Create AKS Risk. Common ownership between a laboratory and referring entities is not inherently problematic – risk arises from financial flows tied to referrals, not ownership per se.
3. Structural Safeguards Are Critical. The absence of: (i) volume-based compensation, (ii) referral tracking, and (iii) financial integration, was central to the favorable outcome.
4. Patient Choice and Transparency Remain Key. Disclosure and freedom of choice continue to serve as important indicators of a compliant arrangement.
5. OIG Remains Focused on Functional Reality. The OIG looks beyond formal structure to assess whether an arrangement functions as a vehicle for remuneration.

Conclusion and Limitations

Based on the specific factual certifications made by Requestor, the OIG concluded that the Arrangement would not generate prohibited remuneration under the AKS and, therefore, would not subject Requestor to administrative sanctions under Sections 1128A(a)(7) or 1128(b)(7) of the SSA.

It is important to note that the Opinion is limited in scope to the specific Arrangement and is not to be relied upon by any person other than the Requestor. The Opinion is also subject to any additional limitations set forth at 42 C.F.R. Part 1008. While the Opinion may not be specifically relied upon for other arrangements, the Opinion provides a clear compliance roadmap to eliminate remuneration flows, preserve independence, and avoid financial linkages to referrals.

If you have any questions or if we may be of further assistance regarding compliance under the AKS or other health law matters, please feel free to contact Bill Kalogredis, Esq. or Sonal Parekh, Esq.

[1] See Section 1128B(b) of the SSA.

[2] 42 U.S.C. § 1320a-7b(b).

The article is also published and available on Law.com/Legal Intelligencer.

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Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, and other healthcare professionals and their businesses as to contractual, regulatory and transactional matters for over 50 years. He is Chairman of Lamb McErlane PC’s Health Law Department. Bill can be reached by email at bkalogredis@lambmcerlane.com or by phone at 610-701-4402.

Sonal Parekh, Esq., is an associate at Lamb McErlane PC who focuses on healthcare transactional matters and a broad range of healthcare regulatory-related issues on behalf of healthcare systems, physicians, dentists, and other healthcare providers, and is a pharmacist by education and training. Sonal can be reached by email at sparekh@lambmcerlane.com or by phone at 610-701-4416.

*This article is for educational purposes only and is not intended to be legal advice. Should you require legal advice on this topic, any health care matter, or have any questions or concerns, please contact Vasilios J. (Bill) Kalogredis, Esq. or Sonal Parekh, Esq.