In Advisory Opinion 13-09, the HHS-Office of Inspector General (OIG) determined that a company’s offer of equity to members of its subsidiary group purchasing organization (GPO), partially in exchange for certain commitments to purchase through the GPO, could constitute a violation of the federal anti-kickback statute, 42 U.S.C. § 1320a–7b(b) (the “AKS”). While Advisory Opinion 13-09 is significant for GPOs, it also resonates more broadly, as to the AKS’s discount safe harbor, as well as any instance where the acquisition of equity is connected to items or services reimbursable under a federal health care program.

Background

The opinion’s Requestor was a company providing financial and performance improvement technology-based products and services. The GPO at issue was wholly-owned by the Requestor, and contributed approximately 60 percent of the Requestor’s revenue. On behalf of its members, the largest of which were hospital systems and integrated delivery systems, the GPO negotiated discounts and other contractual terms with vendors. Continue Reading OIG Issues Unfavorable Opinion on Proposed Offer of Equity Interest to GPO Members