Summer Roundup: OIG Issues Multiple Advisory Opinions Relevant to Manufacturers

Over the 2025 summer, the Department of Health and Human Services’ Office of Inspector General (OIG) issued four advisory opinions—two favorable and two unfavorable—that provide valuable guidance for medical device companies and pharmaceutical manufacturers navigating the federal Anti-Kickback Statute (AKS). These opinions address warranty reimbursements, vendor access fees, physician ownership, and exclusion screening costs. Below is a summary of each.

Manufacturer Payment for Exclusion Screening Services 

In an unfavorable Advisory Opinion, the OIG reviewed a manufacturer’s proposal to pay annual fees to a third-party company that screens and monitors the manufacturer for exclusion from Federal health care programs and compliance with certain other legal requirements. These fees would otherwise be incurred by the manufacturer’s customers—hospitals and health systems—as part of their vendor credentialing processes.

The OIG concluded that the arrangement implicates the AKS because the payment for the exclusion screening could induce customers to purchase the manufacturer’s products, which are reimbursable by Federal health care programs. The OIG emphasized longstanding concerns about manufacturers offering free or subsidized services to customers, particularly when such services relieve the customer of a financial burden. According to the OIG, the arrangement presented anti-competitive risks because the payments for exclusion screening could inappropriately steer business toward the manufacturer and disadvantage competitors unwilling to pay similar fees.

Warranty-Based Reimbursement for Needle Stick Injuries

The OIG approved a manufacturer’s proposal to reimburse purchasers, which include pharmacies, hospitals, clinics, and laboratories, up to $2,500 for actual costs incurred due to a needle stick injury caused by failure of the manufacturer’s device. These costs may include retraining staff, replacing staff, counseling for injured workers, and litigation expenses incurred by a lawsuit initiated by the injured party. The reimbursement was offered under a written warranty and was not tied to purchasing volume or exclusivity.

This Advisory Opinion is one of only three Advisory Opinions that address the AKS warranties safe harbor, which applies to warranties in connection with items for sale if the following conditions are satisfied: 

• The buyer fully and accurately reports any price reduction that was obtained as part of the warranty in the applicable cost reporting mechanism.
• The manufacturer or supplier fully and accurately reports such price reduction.
• If the warranty is for more than one item or one or more items and related services, the federally reimbursable items and services subject to the warranty must be reimbursed by the same Federal health care program in the same payment.
• The manufacturer or supplier does not offer any remuneration for medical, surgical, or hospital expenses incurred by Federal health care program enrollees.
• The manufacturer does not condition the warranty on exclusive use or minimum purchase requirements.

Here, the warranty entails payment for costs incurred due to an injury and does not cover more than one item or related services. So, the first three requirements above are not applicable. The warranty also does not include payment for medical expenses incurred by Federal health care program enrollees, nor does it include any exclusive use or minimum purchase requirements. Thus, the OIG found the arrangement to be protected under the AKS warranties safe harbor. While hardly a ground-breaking conclusion, this Advisory Opinion provides assurance that medical device companies may provide reimbursement for device-related injuries if structured appropriately.

Manufacturer Payments to Access Vendor Billing Portal 

The OIG reviewed a manufacturer’s plan to pay licensing fees to a third-party vendor to access a billing portal used by provider customers for “bill-only” surgical items. “Bill-only” items are surgical devices or components that are not part of a facility’s regular inventory and are instead selected and billed individually for specific procedures, often based on a surgeon’s real-time clinical decisions. The manufacturer asserted that the third-party billing portal was redundant to its own billing and invoicing process and did not offer commercially reasonable benefits to the manufacturer. However, some of the manufacturers’ customers would only do business with the manufacturer if it used the third-party vendor, which evidently brought cost-savings to the customer. The OIG noted that the arrangement did not qualify for protection under the AKS personal services and management contracts safe harbor, as the manufacturer could not certify that the services were commercially reasonable or necessary. Further, the OIG found that the arrangement raised anti-competitive risks and inappropriate steering, especially since some customers required use of the portal as a condition of doing business.

Physician Ownership in Device Manufacturer

This favorable opinion examined whether a manufacturer’s ownership structure—where physicians hold passive investment interests—would trigger sanctions under the AKS. The OIG concluded that the arrangement was protected under the AKS small entity investment safe harbor. The manufacturer certified compliance with all eight safe harbor conditions, including limits on physician ownership, proportional profit distributions, and no marketing or referral requirements tied to ownership. This Advisory Opinion serves as a good reminder that physician investment in manufacturers may be permissible if structured to meet all elements of the AKS small entity investment safe harbor.

Final Thoughts

These Advisory Opinions highlight the importance of structuring manufacturer arrangements with purchasers, vendors, and investors in compliance with the federal AKS. Manufacturers should carefully assess whether their practices could be viewed as offering remuneration to induce purchases or referrals and seek legal guidance when navigating complex relationships.

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