Key Points

• HHS-OIG recently issued an Advisory Opinion finding that proposed JV, if undertaken, could constitute prohibited remuneration under the AKS.
• The scope of material the OIG may consider is limited. The OIG does not opine regarding the intent of the Requester and does not, and cannot under its rules, address defenses recognized under related laws like the FCA in which courts have construed the scope of the AKS.
• If the parties to the arrangement do not have an intent to engage in wrongful conduct and all payments are made at fair market value, the parties to the JV should have dispositive defenses to any contention that they violated the AKS or FCA under multiple court decisions that the OIG did not, and cannot, consider.

On November 17, 2021, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued Advisory Opinion 21-18 (the “Advisory Opinion” or “Opinion”). The OIG concluded that the proposed joint venture (JV) arrangement between a therapy services company and a company that owns skilled nursing facilities (SNFs), if undertaken, could generate prohibited remuneration under the Anti-Kickback Statute (AKS) “if the requisite intent were present.”¹ The OIG observed that its Opinion reflected its longstanding concern regarding JV arrangements, “especially where all or most of the business from the joint venture is derived from one of the joint venture investors.”²

The OIG’s Advisory Opinion is only binding on the Requester, and...

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