The HHS Office of Inspector General (“OIG”) issued Advisory Opinion No. 26-09 (“Opinion”) on April 28, 2026 regarding a proposed arrangement involving the provision of free orthodontic treatment to certain pediatric patients by a multi-location pediatric dental and orthodontic provider (the “Requestor”).  Specifically, the Requestor sought guidance regarding whether the proposed arrangement (the “Arrangement”) would constitute grounds for sanctions under Sections 1128A(a)(7), 1128(b)(7), or 1128A(a)(5) of the Social Security Act (“SSA”) as those sections relate to the Federal Anti-Kickback Statute[1] (“AKS”), as well as the Beneficiary Inducements Civil Monetary Penalty (“CMP”) provisions.

Due to the specific facts and safeguards presented, the OIG issued a favorable opinion even though the OIG concluded that the Arrangement could generate prohibited remuneration under both the AKS (if the requisite intent were present) and the Beneficiary Inducements CMP. Notwithstanding the foregoing, the OIG determined that the Arrangement posed a sufficiently low risk of fraud and abuse such that the OIG would not impose administrative sanctions.

Factual Background

Requestor is an exclusively pediatric dental and orthodontic services provider operating practices in three cities. Under the Arrangement, Requestor proposed providing free, comprehensive orthodontic treatment (the “Free Service”) to up to one existing patient annually at each practice location, for a total of up to three recipients per year. According to the Requestor, orthodontic treatment generally spans approximately 12-24 months and has an approximate value of $4,725 per patient. Requestor further certified that it would not bill any Federal health care programs for the Free Service. Additionally, Requestor represented that the Arrangement was intended solely to provide charitable care to underserved pediatric patients while highlighting the impact orthodontic treatment can have on oral and mental health outcomes.

Under the Arrangement, treating dentists and orthodontists employed or engaged by Requestor could nominate existing patients for the Free Service. To be eligible, nominees must: (i) be residents within the applicable state; (ii) be between the ages of 10 and 14; (iii) have clinical necessity for orthodontic treatment; and (iv) have financial need and the potential community impact. Importantly, patients could not self-nominate for the Free Service. Additionally, if a nominee maintained insurance coverage (including Medicaid), Requestor would require documentation establishing that orthodontic treatment had been denied by the patient’s insurer.

Before treatment could begin, recipients would also need to satisfy baseline oral health requirements, including “cavity clearance” and demonstration of good oral hygiene. However, in no event would recipients be required to obtain cavity clearance or other dentistry services from Requestor itself and could instead obtain such services from any provider of their choosing.

The selection process itself involved a weighted scoring methodology. Specifically, candidates would be evaluated based upon: (i) clinical need (40%) (based on a thorough review of the nominee’s dental and orthodontic records); (ii) financial hardship (40%) (based on the nominee’s household income); and (iii) community impact (20%) (based on factors such as whether nominee was in foster care or lived in a single-parent household). Requestor certified that it would maintain documentation regarding nominations and decisions and would conduct periodic audits of the process.

Perhaps most importantly from a fraud-and-abuse perspective, Requestor represented that it would not market or advertise the Arrangement in a manner intended to attract new patients. Specifically, Requestor certified that it would not (i) publicize that recipients were selected from its existing patient population; (ii) advertise annual selection opportunities; nor (iii) promote the Free Service through office advertising, targeted patient communications, email campaigns, text messages, or similar solicitation efforts.

Requestor indicated that any public references to the Arrangement would be for the sole purpose of highlighting the community service aspect of the Free Service and its positive impact on recipients, and limited to general community-service messaging, patient outcome summaries, and consensual testimonials without promotional or solicitation language. Requestor certified that recipients would not be required or expected to obtain future services from Requestor as a condition of receiving the Free Service.

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.

Separately, the Beneficiary Inducements CMP imposes prohibits offering remuneration to Medicare or Medicaid beneficiaries that the offeror knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier for reimbursable services. For purposes of the Beneficiary Inducements CMP, “remuneration” expressly includes free items or services or items/services offered below fair market value.

Legal Analysis

In the Opinion, the OIG expressly acknowledged that the Arrangement implicated both the AKS and the Beneficiary Inducements CMP because Requestor proposed offering free orthodontic services to patients, including Federal health care program beneficiaries, who could later seek reimbursable services from Requestor. Nevertheless, the OIG ultimately concluded that the safeguards incorporated into the Arrangement reduced the overall risk profile sufficiently to justify favorable treatment.

A. Reduced Risk of Patient Steering

A primary component of the OIG’s analysis focused on whether the Arrangement improperly steered patients toward Requestor. Here, the OIG focused on the facts that: (i) the Free Service was available only to existing patients who had already independently selected Requestor for care; (ii) Requestor would not advertise ongoing opportunities to receive free treatment nor publicize that recipients were selected from among Requestor’s existing patient population; and (iii) patients could not nominate themselves. For these reasons, the OIG found that the Arrangement significantly reduced the likelihood that new patients would seek care from Requestor merely to obtain free orthodontic treatment. The OIG’s analysis demonstrates continued regulatory concern regarding arrangements that could function, directly or indirectly, as marketing tools designed to generate future reimbursable business. At the same time, the Opinion illustrates that carefully limiting publicity and eliminating active solicitation may substantially reduce perceived fraud-and-abuse risk.

B. Limited Risk of Inappropriate Utilization or Increased Federal Health Care Program Costs

The OIG found that the Arrangement is unlikely to lead to inappropriate utilization or increased costs to Federal health care programs. Here, the OIG relied heavily upon Requestor’s certification that (i) it would not bill Federal health care programs for the Free Service; (ii) recipient selection would be selected pursuant to a consistently administered scoring system based upon clinical need, financial hardship, and community impact, rather than upon factors incentivizing utilization; and (iii) recipients would remain free to obtain cavity clearance and other required dental services from providers unaffiliated with Requestor and would not be obligated to obtain future services from Requestor. According to the OIG, these safeguards reduced the risk that the Free Service would function as a mechanism for generating downstream reimbursable business.

C. Narrow Scope and Charitable Purpose of the Arrangement

The OIG additionally emphasized the limited scale and charitable nature of the Arrangement. Specifically, the Arrangement contemplated only up to one recipient per practice location annually. The OIG also relied upon Requestor’s certification that any public references to the program would remain limited to general descriptions of its charitable purpose and patient impact without promotional language. Importantly, the OIG expressly noted that it “likely would reach a different conclusion” where a provider publicizes the existence of an ongoing free-service selection process from its existing patient population pool because such activity could materially increase risks of patient-steering and unfair-competition.

D. Beneficiary Inducements CMP Analysis

Interestingly, while the OIG noted that the Arrangement implicated the Beneficiary Inducements CMP, with no applicable exceptions to the definition of remuneration, because the provision of free orthodontic treatment could influence beneficiaries’ selection of Requestor for reimbursable services, the OIG exercised enforcement discretion and declined to impose sanctions for the aforementioned reasons.

OIG Takeaways and Compliance Principles

Consistent with prior OIG guidance and advisory opinions, Opinion 26-09 reinforces several important compliance principles.

1. Charitable Intent Alone is Insufficient. Even where an arrangement is motivated by charitable objectives, the OIG will still analyze whether remuneration could improperly induce referrals or influence patient selection.
2. Marketing Restrictions Matter. The OIG placed substantial emphasis on Requestor’s limitations regarding advertising, solicitation, and patient outreach. Publicizing ongoing opportunities for free care may materially increase AKS and Beneficiary Inducement risk.
3. Existing-Patient Limitations Reduce Risk. Restricting eligibility to existing patients reduced the likelihood that individuals would select Requestor in hopes of receiving free services.
4. Objective Selection Criteria Are Important. The use of documented and consistently administered selection criteria tied to clinical need, financial hardship, and community impact significantly strengthened the Arrangement’s compliance posture.
5. No Requirement for Downstream Services. Allowing recipients to obtain related services from unaffiliated providers and avoiding any expectation of future business relationships materially reduced concerns regarding inducement and patient retention.
6. Scale and Scope Continue to Matter. The OIG repeatedly emphasized the limited size of the program. A materially larger or more commercially oriented arrangement could produce a different enforcement outcome.

Conclusion and Limitations

Based upon the specific facts and certifications presented, the OIG concluded that although the Arrangement could generate prohibited remuneration under both the AKS and the Beneficiary Inducements CMP, the Arrangement posed a sufficiently low risk of fraud and abuse such that the OIG would not impose administrative sanctions.

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 meaningful insight regarding how providers may structure limited charitable care initiatives involving free services while mitigating AKS and Beneficiary Inducement risk.

If you have any questions or if we may be of further assistance regarding compliance under the AKS, Beneficiary Inducements CMP, 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).

Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, veterinarians, and other health care 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 health care transactional matters and a broad range of health care regulatory-related issues on behalf of health care systems, physicians, dentists, behavioral health providers, and other health care 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.