Stark Compliance Is Not Enough: OIG Reemphasizes AKS Risk Beyond Fair Market Value

In a recent update that should command the attention of healthcare providers, compliance officers, and healthcare counsel alike, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) issued two new FAQs emphasizing its view that compliance with the Stark Law and adherence to fair market value (FMV) principles, standing alone, do not insulate a healthcare arrangement from liability under the federal Anti-Kickback Statute (AKS).

While the guidance does not create new law, it underscores a renewed enforcement posture and signals that regulators remain focused on substance over form when evaluating financial relationships involving referral sources.

Stark vs. AKS: Different Statutes, Different Risks

At the core of the OIG’s message is a fundamental—but often blurred—distinction between the Stark Law and the AKS. The Stark Law is a strict liability statute: if a financial relationship between a physician and an entity fails to meet a statutory or regulatory exception, prohibited referrals and billing violations may result, regardless of intent. By contrast, the AKS is an intent-based criminal statute that prohibits knowingly and willfully offering or receiving remuneration to induce or reward referrals of items or services reimbursable under federal healthcare programs.

The OIG’s updated FAQs make clear that satisfying a Stark exception does not resolve AKS exposure. As the agency bluntly states, compliance with Stark “is not evidence” that the parties lack the intent required for an AKS violation. This clarification directly rebuts a persistent industry assumption: that if arrangement is Stark-compliant, it is inherently low-risk. According to OIG, that assumption is incorrect.

FMV Isn’t Enough!

Equally significant is the OIG’s rejection of another widespread compliance shortcut: the notion that compensation set at fair market value eliminates kickback risk. The OIG reiterates that FMV is only one component of a potential AKS safe harbor analysis and is not, by itself, dispositive. Even arrangements that are well-documented, commercially reasonable, and benchmarked to FMV may still violate the AKS if one purpose of the remuneration is to induce referrals.

In fact, the OIG explicitly rejected the argument that FMV alone neutralizes unlawful remuneration, noting that such a position is inconsistent with statutory text, regulatory safe harbors, and decades of agency guidance.

The takeaway is straightforward: FMV is necessary, but it is not sufficient.

The “Sporting Event” Example: A Practical Warning

To illustrate its position, the OIG revisits a familiar scenario: nonmonetary compensation such as entertainment or sporting event tickets provided to referring physicians.

Such arrangements may, under certain circumstances, fit within a Stark exception for nonmonetary compensation. However, the OIG emphasizes that they are unlikely to satisfy an AKS safe harbor and therefore remain subject to scrutiny based on the “totality of the circumstances,” including intent.

This example highlights a critical compliance gap: arrangements that appear technically compliant on paper may still raise significant enforcement risk when viewed through the AKS lens.

Totality of the Circumstances: The Governing Standard

The unifying theme of the OIG’s guidance is its insistence on a holistic, facts-and-circumstances analysis. Where an arrangement does not squarely meet every element of an AKS safe harbor, regulators will evaluate the full context, including:

• The purpose and structure of the compensation
• The relationship between the parties
• The presence of referral patterns or volume-based incentives
• Indicators of intent to induce or reward referrals

Even partial compliance with a safe harbor (or strict adherence to Stark) will not shield an arrangement from scrutiny if these broader factors suggest improper intent.

Compliance Implications for Providers

For healthcare entities, the OIG’s message carries several immediate and practical implications:

• Dual-Track Analysis Is Essential. Organizations must evaluate financial relationships under both Stark and AKS frameworks independently. Passing one test does not satisfy the other.
• FMV Is a Floor, Not a Ceiling. Fair market value should be viewed as a baseline requirement,not a safe harbor substitute.
• Documentation Must Address Intent. Compliance efforts should go beyond valuation reports and contract formalities to include evidence supporting legitimate, non-referral-based business purposes.
• Nonmonetary Compensation Deserves Heightened Scrutiny. Gifts, entertainment, and other perks—particularly those approaching regulatory limits—should be carefully reviewed for AKS risk.
• Periodic Audits Are Critical. Legacy arrangements that rely heavily on Stark exceptions or FMV analyses should be revisited to ensure they withstand a totality-of-the-circumstances review.

Conclusion

The OIG’s recent FAQs do not break new legal ground, but they deliver a pointed reminder: technical compliance is not a safe harbor for intent-based enforcement. Healthcare organizations that continue to rely on Stark exceptions and FMV benchmarks as proxies for overall compliance risk exposure may find themselves vulnerable in an enforcement environment increasingly focused on substance, intent, and real-world behavior.

GWB represents physicians and other healthcare providers in connection with government investigations and litigation as well as regulatory issues related to the Stark Law and Anti-Kickback Statute, as well as other statutes and regulations. If you need assistance with such a matter, please contact us.