High-Risk Arrangements Under the Anti-Kickback Statute: Marketing, Joint Ventures, and Physician Recruitment

The Anti-Kickback Statute (“AKS”) is broad enough to capture almost any financial arrangement in healthcare. While safe harbors protect certain transactions, other business models routinely attract regulatory scrutiny. These high-risk arrangements share a common theme - they create financial incentives that can influence referrals, physician decision-making, or utilization of federally reimbursed services.

Executives, investors, operators, and compliance officers need to know where these risks lie. By identifying the most common red flags, stakeholders can structure deals more carefully, strengthen compliance programs, and avoid costly enforcement actions.

Marketing and Lead Generation

Marketing plays an important role in expanding patient access and growing healthcare businesses, but marketing arrangements can create AKS exposure when they involve payments tied to the volume or value of referrals.

Regulators have repeatedly taken issue with “per-click,” “per-lead,” or commission-based arrangements where compensation varies with patient volume. These structures raise concerns that marketers, rather than clinicians, are driving referrals. Telehealth and digital health companies, in particular, have faced AKS scrutiny over volume-based lead generation models.

Organizations that rely on marketing should consider fixed-fee arrangements, document the business purpose of their contracts, and ensure compliance officers review all agreements before execution.

Joint Ventures and Physician-Owned Entities

Joint ventures can create opportunities for collaboration and growth, but they also fall under AKS scrutiny when physician owners profit from referrals. Regulators pay close attention to whether investment terms, equity allocations, or profit distributions align with fair market value (“FMV”) and legitimate investment risk, or whether they simply reward referral volume.

The U.S. Department of Health and Human Services Office of Inspector General (“OIG”) has issued safe harbors for certain investment arrangements, such as ambulatory surgery centers, but the conditions are exacting. Deals that fail to meet every requirement remain vulnerable.

Investors and executives should involve compliance teams early in the structuring process, conduct FMV analyses, and avoid arrangements that disproportionately benefit referral sources.

Physician Recruitment Incentives

Hospitals and health systems frequently offer recruitment packages to attract physicians, particularly in underserved areas. While recruitment incentives can support access to care, they raise AKS concerns if structured improperly.

Regulators evaluate whether recruitment packages exceed FMV, tie compensation to referral obligations, or disguise ongoing employment subsidies. If incentives go beyond legitimate recruitment needs, the arrangement can trigger enforcement.

Operators should structure recruitment incentives with clear documentation, maintain independent valuation support, and avoid linking packages to patient referrals.

Vendor and Supplier Discounts

Discounts and rebates are common in healthcare supply chains, but aggressive or opaque pricing practices can create AKS risk. Regulators focus on whether discounts function as disguised payments for referrals or create unfair advantages in referral-driven markets.

To minimize risk, organizations must disclose discounts clearly, account for them properly, and avoid tying them to referral arrangements. Compliance officers should audit discount programs regularly to ensure transparency.

Practical Takeaways for Stakeholders

High-risk arrangements do not always violate the AKS, but they draw attention. Stakeholders can reduce exposure by:

• Using independent FMV analyses to validate compensation and investment terms.
• Documenting the legitimate business purpose of each arrangement.
• Avoiding compensation models that vary with referral volume.
• Conducting compliance audits of contracts, vendor agreements, and physician arrangements.

Conclusion

The AKS casts a wide net, and certain types of business arrangements consistently land in regulators’ crosshairs. Marketing agreements tied to volume, joint ventures with physician investors, recruitment packages, and aggressive discount programs all present heightened risk. By approaching these arrangements cautiously, executives, investors, operators, and compliance officers can protect enterprise value, reduce regulatory exposure, and build compliant strategies for growth.

This post is for informational purposes only and does not constitute legal advice. For guidance tailored to your organization, contact Mooradian Law at info@mooradian.law or (734) 219-4890.