OIG Protects Device Affiliate’s Hearing Referral Fees

By Jake Leys

OIG Advisory Opinion 26-18 Applies the Referral Services Safe Harbor to a Device Manufacturer’s Subsidiary

On September 9, 2026, the U.S. Department of Health and Human Services Office of Inspector General (OIG) posted Advisory Opinion 26-18 (AO 26-18), a favorable opinion concluding that fees paid by specialist groups to participate in a referral service operated by the subsidiary of an ear, nose, and throat (ENT) device manufacturer would be protected by the Anti-Kickback Statute (AKS) referral services safe harbor at 42 C.F.R. § 1001.952(f). The opinion is a useful reference for device, diagnostics, and digital health companies whose technology identifies patients who may need specialty care.

What Changed: How the Manufacturer-Affiliated Hearing Referral Service Works

Primary care clinicians would pay a subscription fee to use the parent company’s handheld hearing device, which includes a hearing check program. When results fall outside normal ranges, the device offers a “Refer” option. If the clinician selects it and the patient consents, a Referral Coordinator employed by the requestor validates the referral against set criteria and forwards it to a participating group of hearing professionals. Each participating group would pay the requestor an annual fee to participate.

Why the Referral Services Safe Harbor Was Satisfied

Based on the requestor’s certifications, OIG found each safe harbor condition met:

• Participation criteria would be applied equally to every group seeking to join;
• The annual fee would be set in advance, consistent with the estimated cost of operating the service, apportioned equally based on the number of hearing professionals in each group, and owed regardless of referral volume or whether any referred patient receives care;
• The requestor would impose no clinical protocols, product restrictions, or pricing demands on participating groups; and
• The requestor would make the required disclosures to each patient seeking a referral, signed by the patient and maintained in a written record.

The requestor also certified an annual “True-Up” that adjusts the next year’s fee up or down based on actual aggregate operating costs, not referral counts. On the referring side, it would not offer clinicians subscription discounts tied to referrals or impose exclusivity or minimum referral expectations.

Limits of AO 26-18

Only the requestor may rely on the opinion. OIG expressly declined to opine on the subscription arrangement between the requestor and primary care clinicians, and it expressed no opinion on other laws, including the physician self-referral law, or on False Claims Act liability. Companies considering a similar model should evaluate those issues, and applicable state law, separately.

Practical Implications for Device, Diagnostics and Digital Health Companies

Companies operating or considering a provider-funded referral service should:

• Set participant fees in advance based on documented operating costs, assess them equally, and reconcile them periodically;
• Keep fees and referring-clinician terms independent of referral volume;
• Avoid imposing clinical, product, or pricing requirements on participating providers; and
• Deliver the required disclosures and retain signed records.

AO 26-18 shows that a device company’s affiliate can connect patients with specialty care, provided participant fees fund the cost of the service rather than purchase referrals.

Jake Leys, Associate Attorney

How Gardner Law Can Help

Gardner Law advises medical device, diagnostics, and digital health companies on Anti-Kickback Statute compliance and the development of compliant referral services, provider relationships, and commercial arrangements. Our attorneys work with in-house legal counsel, compliance officers, and commercial and finance teams to evaluate referral program structures, develop cost-based fee methodologies and reconciliation processes, and draft provider agreements, participation criteria, and required patient disclosures. We also help companies assess clinician subscription arrangements, referral incentives, and other financial relationships that may raise fraud and abuse concerns.

Our team provides guidance on related federal and state fraud and abuse laws, the physician self-referral law, False Claims Act exposure, and privacy and data protection requirements affecting patient referrals and information sharing. Our compliance team is ready to assist with compliance risk assessments, internal policies, employee training, program monitoring, and OIG advisory opinion requests. By combining regulatory analysis with practical implementation guidance, Gardner Law helps companies develop and maintain compliant programs that support commercialization, provider collaboration, and patient access to care.