HHS Office of Inspector General Declares That Fair-Market-Value Transactions Can Be Kickbacks

At a Glance

• The Office of Inspector General (OIG) has reiterated its previously expressed position that compliance with fair market value (FMV) does not, by itself, ensure compliance with the federal Anti-Kickback Statute (AKS).
• The guidance underscores the compliance risk-reduction benefit of documenting a clear business rationale for arrangements with potential referral sources.

On April 23, 2026, the Office of Inspector General of the US Department of Health and Human Services (OIG) issued a new FAQ that addresses the question, "Can fair market value arrangements violate the Federal anti-kickback statute?" The OIG's answer is "yes":

Ensuring that remuneration in an arrangement is consistent with fair market value is a best practice and may reduce the risk of fraud and abuse under the Federal anti-kickback statute. However, an arrangement may violate the Federal anti-kickback statute even where it involves remuneration consistent with fair market value.

The OIG observed that "some health care industry stakeholders have taken the position that, so long as the remuneration … is consistent with fair market value, there is no unlawful remuneration under the Federal antikickback statute, and consequently, there can be no liability under the Federal anti-kickback statute." In fact, this is a position that multiple courts have embraced. See, e.g., Bingham v. HCA, Inc., 783 Fed. App'x. 868, 873 (11th Cir. 2019); United States v. Ctr. for Diagnostic Imaging, Inc., 787 F. Supp. 2d 1213, 1223 (W.D. Wash. 2011); Klaczak v. Consol. Med. Transp., 458 F. Supp. 2d 622, 678-79 (N.D. Ill. 2006).

The FAQ emphasized, however, that it has long been the OIG's position that a fair-market-value arrangement can still violate the AKS. For instance, the OIG noted that many of its regulatory safe harbors require multiple elements in addition to FMV that must be satisfied in order to receive protection, and that prior compliance guidance and advisory opinions dating from 2003 to 2023 have also cautioned that an FMV arrangement may still violate the AKS if it is intended, even in part, to induce referrals.

The FAQ concludes with a summary of the OIG's position: "In sum, while adhering to the practice of ensuring the fair market value of remuneration is a highly useful general practice, it is not a guarantee of legality."

Analysis

The FAQ does not provide examples of when an FMV transaction might violate the AKS, though the advisory opinions cited in the FAQ involved scenarios in which a laboratory was paying a physician for personal services, such as specimen collection. The OIG would also presumably view paying FMV compensation to a referral source to perform unnecessary services or to lease unneeded equipment or space as posing AKS compliance risk. By contrast, where a referral source leases space, rents equipment, or procures services at FMV rates from a party to which it makes referrals, there is presumably a lower compliance risk.

In light of the FAQs, it is best not to rely on FMV alone to ensure compliance. A better practice is to prepare a written business rationale and justification before entering into agreements to pay physicians / referral sources for consulting, management, or other services.