On June 30, 2026, the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) issued Advisory Opinion No. 26-15, finding that a home health agency operator’s subscription payment to a vendor of electronic referral system software would generate prohibited remuneration under Section 1128B(b) of the Social Security Act (the Federal Anti-Kickback Statute). Although an advisory opinion is limited to the specific facts set forth by the party requesting the opinion, it can be instructive for other providers. The party requesting the advisory opinion is a home health agency operator, which paid a subscription fee to a vendor of electronic referral system software, under which the subscriber may receive and accept electronic referrals from hospitals soliciting home health agency availability for individual patients who are being discharged. 

While the software provides participating hospitals with a list of all home health agencies in the region, regardless of whether they are subscribers to the software, only home health agency subscribers are able to receive electronic communications from the hospitals. Subscribers have the advantage of receiving and accepting electronic referrals immediately through the software while non-subscribers would have to receive and accept referrals through other means (e.g., email, phone, electronic fax). Additionally, the cost of the subscription is not based solely on the vendor’s cost to provide the referral service.

OIG found that under the Federal Anti-Kickback Statute, the arrangement afforded to subscribers of the electronic referral system software poses a risk of inappropriate steering and unfair competition due to the significant competitive advantage that subscribers have over nonsubscribers in being able to electronically receive and accept home health referrals. OIG also found that the anti-competitive effect is further exacerbated for home health agencies that cannot afford the subscription, and therefore, it appeared that the subscribers were getting patients based on their ability to pay for the subscription, as opposed to the quality of their services. The opinion noted that subscribers to the electronic referral system software could face pressure to recoup the costs associated with participation, thereby creating the incentive to bill for services that are not medically necessary and resulting in increased costs to the federal healthcare system.

Given that it is fairly common for healthcare providers, including aging service providers, to use electronic referral systems, a diligent review of the terms and conditions of these arrangements, as well as their impact on competition may be worthwhile in light of this advisory opinion. We encourage members to work closely with their legal counsel and compliance officer to ensure that their electronic referral system arrangements do not run afoul of the Federal Anti-Kickback Statute.