HHS OIG Advisory Opinion 25‑12: Recruiting Bonuses for Family‑Care Attendants Trigger AKS and Beneficiary Inducements CMP Risk

Key Takeaways

• Targeted recruiting that doubles as patient acquisition is high‑risk. When a home health agency’s prospective employee is a Medicaid beneficiary’s surrogate decision‑maker, advertising a sign-on bonus can function as a direct inducement for the beneficiary’s selection of the agency — implicating both AKS and the Beneficiary Inducements CMP.
• Quality and competition concerns matter. OIG flagged the arms‑race risk of escalating bonuses potentially diverting resources from care delivery — classic program‑integrity considerations that can tip a close call.
• “Employee” payments aren’t automatically protected. Even bona fide employment relationships do not place sign‑on bonuses within the AKS employee exception/safe harbor if the payment is effectively a pre‑employment inducement for an all‑but‑guaranteed referral/selection decision. But the employee safe harbor can be relied on when a bonus arrangement is truly about employment compensation.
• Advisory opinions can be used offensively. AO 25‑12 highlights how a requestor may seek an opinion not only for compliance clarity but to spotlight competitors’ practices. While opinions bind only the requestor, they often influence market behavior and can serve as strategic levers in competitive environments.

The Department of Health and Human Services, Office of Inspector General (“OIG”) recently released an unfavorable advisory opinion, OIG Advisory Opinion No. 25‑12 (“AO 25‑12” or the “Opinion”) addressing a home health care agency operator’s proposal to market sign‑on bonuses to prospective employees of its home care agency with the intention of employing those individuals for the provision of services to other individuals, who most often would be family members of the prospective employees (the “Proposed Arrangement”). OIG concluded that: (1) under the federal Anti-Kickback Statute (“AKS”), the proposal would be a prohibited offer of remuneration if there is intent to induce referrals, which could lead to civil monetary penalties and exclusion from Medicare/Medicaid; and (2) under the Beneficiary Inducements civil monetary penalty (“CMP”), the proposal would also be a prohibited offer of remuneration, which could result in civil monetary penalties and exclusion from federal programs.

The Advisory Opinion

A home health care agency (the “Requestor”) operates in a state where the Medicaid program covers in-home support services for eligible members. Individuals eligible for the support services can select attendants of their choice to provide the services. Under the state’s Medicaid program, a home care agency that provides in-home support services employs the attendant and provides additional support, training, and supervision, including 24-hour back up services for scheduled shifts and staff nurse(s) to supervise attendants for any health maintenance activities. Agencies submit claims for the services performed by the attendants to the state Medicaid program.

The Requestor expects that the attendants primarily would be family members of the individuals eligible for the services, and that in such cases the attendants would be the decision-makers selecting an agency on behalf of their family members. Under the Proposed Arrangement, the Requestor would market employment opportunities to prospective attendants, who would then become bona fide employees once hired. To be competitive in the market, the Requestor would offer a sign-on bonus to prospective attendants, as the Requestor certified may be a practice of other agencies in the community. The Requestor’s express purpose of the sign-on bonus would be to entice prospective attendants to choose it over other agencies for the provision of in-home support services to the Medicaid-eligible individual.

The AKS makes it a criminal offense to knowingly and willfully offer remuneration to induce referrals or purchases of items reimbursable under federal healthcare programs. But the statute explicitly provides that payments by an employer to a bona fide employee for employment in the provision of covered items or services is not treated as an offense under the AKS. Interpreting this statutory exception, OIG has promulgated a “safe harbor” regulation stating that the term “remuneration,” as used in the AKS, does not include “any amount paid by an employer to an employee, who has a bona fide employment relationship with the employer, for employment in the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs.”

OIG observed that the Proposed Arrangement implicates the AKS because the Requestor would offer the sign-on bonuses to prospective employees who would be family members of the service recipients, and who would act as decision-makers for their family members in selecting the agency from which they would receive Medicaid-reimbursable services.

OIG concluded that the Proposed Arrangement would not fit within the employee safe harbor. OIG acknowledged that sign-on bonuses are ordinary offerings, and even when they implicate the AKS they are often low-risk. However, under the particulars of this Proposed Arrangement, OIG found an inextricable link between the employment of the attendant and the referral of the attendant’s Medicaid-eligible family members to the Requestor’s agency because the Requestor expected that the attendants would select an agency on behalf of the family member. Therefore, OIG perceived the sign-on bonus as a solicitation for an all-but-guaranteed referral before employment commences, and not an amount paid by an employer to an employee.

OIG further concluded that the risk of fraud and abuse was not sufficiently low to issue a favorable opinion because the sign-on bonus had great potential to inappropriately steer prospective attendants to select one agency over another not just for employment, but for the provision of Medicaid-reimbursable items and services to the attendant’s family member. OIG posited that the Proposed Arrangement also might incentivize the Requestor and its competitors to offer ever-increasing sign-on bonuses to induce selection of their agencies, diverting resources from services to beneficiaries and incentivizing selection of a home health agency based on which offered the highest bonus, not which provided the best quality services, training, and support.

OIG also analyzed the Proposed Arrangement with respect to the Beneficiary Inducements CMP. This statute provides for the imposition of civil monetary penalties against any person who offers or transfers remuneration to a Medicare or state healthcare program beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier for the order or receipt of any item or service for which payment may be made, in whole or in part, by Medicare or a state healthcare program. The Proposed Arrangement would implicate the statute when the Requestor offers a sign-on bonus to a prospective attendant who is in a position to select an agency for a family member because the remuneration offer would likely influence the attendant to choose the Requestor’s agency for the provision of Medicaid-reimbursable items and services.

Analysis

OIG’s unfavorable Advisory Opinion 25-12 draws a sharp contrast with OIG’s recent embrace of the employee safe harbor in another context. In AO 23-07, OIG issued a favorable opinion allowing a multi-specialty physician practice to pay its employed physicians a quarterly bonus equal to 30% of net profits from ambulatory surgical center (“ASC”) facility-fee collections attributable to the physician’s procedures because all recipients were bona fide employees and the payments were for employment in furnishing reimbursable services within a single legal entity (the physician practice and its ASC division). In AO 23‑07, OIG underscored the broad protection of the employee safe harbor when conditions are met, while cautioning that similar profit‑based payments to nonemployees or owners outside the safe harbor could be problematic.

AO‑25‑12 also potentially illustrates an “offensive” use of the advisory opinion process. In these scenarios, a requestor frames an opinion request as if seeking approval, but another aim is to provoke OIG’s public analysis of a competitor’s practice. AO 25‑12 fits that pattern: the Requestor certified that other agencies in the community may already be using sign‑on bonuses like the one OIG ultimately found problematic, effectively inviting OIG to opine on a model that rivals purportedly deploy (and doing so in a way that squarely raises steering, anti‑competitive, and quality‑of‑care concerns). Although advisory opinions bind only the requestor, they are sometimes leveraged to spotlight — and potentially undermine — competitive business models.

Conclusion

AO‑25‑12 underscores how even seemingly routine incentives — like sign‑on bonuses — can trigger significant risk under the AKS and Beneficiary Inducements CMP when tied to referral dynamics. It also illustrates how advisory opinions may serve not only as compliance tools but as strategic levers in competitive markets. Given the complexity and potential consequences, healthcare organizations should engage experienced counsel to evaluate proposed arrangements for fraud and abuse risk — or to explore whether a carefully crafted advisory opinion request could advance both compliance and strategic objectives. For more information on OIG Advisory Opinion No. 25-12 or other issues addressed herein, please contact AGG Healthcare attorney Lisa Churvis.