AKS Enforcement Isn’t Slowing Down:  Is Your Nursing Facility Ready for 2026?

As we begin a new year, the first quarter is an ideal time for nursing facilities to step back and evaluate the strength and alignment of their compliance programs—particularly with respect to the federal Anti-Kickback Statute (AKS). Enforcement trends, evolving reimbursement structures, and increased regulatory scrutiny continue to make financial relationships in long-term care a high-risk area. An annual review of AKS compliance is not simply a best practice; it is a proactive safeguard against costly investigations, repayment obligations, civil monetary penalties, and reputational harm.

On November 20, 2024, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued the Nursing Facility Industry Segment-Specific Compliance Program Guidance (ICPG), providing updated recommendations tailored specifically to nursing facilities. While the 2024 ICPG does not replace the OIG’s prior guidance—the 2000 Compliance Program Guidance for Nursing Facilities and the 2008 Supplemental Compliance Program Guidance for Nursing Facilities—it reflects the government’s current enforcement priorities and expectations. Together, these publications form a comprehensive roadmap for evaluating whether your compliance program, including AKS safeguards, is appropriately designed and operating effectively.

As facilities prepare for the year ahead, now is the time to assess whether financial arrangements with referral sources, vendors, consultants, medical directors, pharmacies, therapy providers, and others remain commercially reasonable, properly documented, and consistent with current OIG guidance. A thoughtful Q1 review can help ensure that your compliance program is not only active on paper but truly commensurate with today’s regulatory environment.

Overview of the 2024 Nursing Facility ICPG

The 2024 Nursing Facility Industry Segment-Specific Compliance Program Guidance (ICPG) reflects OIG’s clear message that compliance is not a siloed administrative function—it is closely intertwined with quality of care and resident safety. The guidance emphasizes the “collaboration and integration of efforts between compliance and quality programs to monitor nursing facilities’ compliance with laws and regulations that govern health and safety standards, resident care, and quality of life.” (ICPG at pp. 6, 12.) In other words, a strong compliance program should actively support—and be supported by—your facility’s quality assurance and performance improvement (QAPI) efforts. Compliance oversight and clinical leadership must work together to identify risks, monitor trends, and implement corrective actions.

The Nursing Facility ICPG should also be read in conjunction with OIG’s General Compliance Program Guidance (November 6, 2023), which sets forth foundational compliance principles applicable across the healthcare industry. The 2023 General Guidance outlines core elements such as leadership commitment, risk assessment, training, reporting mechanisms, investigations, and corrective action. The 2024 Nursing Facility ICPG builds on that framework by tailoring recommendations to the operational realities and risk profile of long-term care providers.

OIG articulates four overarching goals for the Nursing Facility ICPG:

1. Reduce fraud, waste, and abuse;
2. Promote cost-effective and quality care;
3. Enhance the effectiveness of providers’ operations; and
4. Propel improvements in compliance, quality of care, and resident safety within nursing facilities.

To advance these goals, Section II of the ICPG—Compliance Risk Areas and Recommendations for Mitigation—identifies four primary risk areas for nursing facilities:

• (A) Quality of Care and Quality of Life
• (B) Medicare and Medicaid Billing Requirements
• (C) The Anti-Kickback Statute (AKS)
• (D) Other Risk Areas, including related-party transactions, the Physician Self-Referral Law (Stark Law), anti-supplementation rules, HIPAA privacy, security and breach notification requirements, and civil rights obligations.

For compliance leaders and administrators, this structure provides a practical roadmap. It signals where OIG expects facilities to focus monitoring, auditing, and internal controls—and underscores that financial integrity, billing accuracy, referral relationships, and resident care are all part of a single, integrated compliance strategy.

Anti-Kickback Statute (AKS): Key Risks for Nursing Facilities

Section II.C. of the Nursing Facility ICPG focuses specifically on the federal Anti-Kickback Statute (AKS). The AKS prohibits, in pertinent part, the knowing and willful offer, solicitation, or exchange of anything of value in return for referrals of items or services paid for by Federal health care programs (FHCPs), including Medicare and Medicaid.

Nursing facilities operate in a highly referral-driven environment. Facilities may receive referrals from physicians and other healthcare professionals, hospitals and discharge planners, hospices, home health agencies, other nursing facilities, FHCPs, and even FHCP enrollees. At the same time, nursing facilities routinely refer residents to, or order items and services from, durable medical equipment (DME) suppliers, laboratories, diagnostic testing facilities, long-term care pharmacies, hospitals, physicians, therapy providers, and other facilities. Each of these relationships presents potential AKS exposure if financial arrangements are not carefully structured and monitored.

Importantly, certain arrangements may be protected if they meet a statutory exception or regulatory “safe harbor.” These exceptions and safe harbors are critical because they can effectively immunize qualifying payment and business arrangements from criminal and civil prosecution under the AKS. However, safe harbor protection is technical and highly specific; arrangements that fall outside these protections are not automatically illegal, but they must be carefully analyzed for risk.

Violations of the AKS carry significant consequences, including criminal penalties, civil monetary penalties, potential imprisonment, and exclusion from participation in federal health care programs. For most nursing facilities, exclusion alone would be financially catastrophic.

The OIG identifies several common kickback risk areas in the nursing facility context. These can be grouped into six general categories:

1. Arrangements Where the NF or NF Decisionmakers Receive Goods or Services for Free or Below Fair Market Value (FMV) from Ancillary Service Providers and Suppliers Seeking Orders and Referrals.
2. Arrangements Where Remuneration is Provided to the NF by Other Providers Seeking Referrals.
3. Arrangements Where the NF Provides Goods, Services, Gifts, or Excessive Compensation to Actual or Potential Sources of Referrals for Free or Less than FMV.
4. Patient inducements.
5. Swapping.
6. Supplementation.

For compliance officers and administrators, the key takeaway is that AKS risk often arises not from overtly improper conduct, but from commonplace business arrangements that are insufficiently documented, not set at fair market value, or not regularly reviewed. An annual review of contracts, compensation structures, referral relationships, and vendor arrangements—particularly in light of the 2024 ICPG—can significantly reduce exposure and demonstrate a good-faith commitment to compliance.

Practical Considerations and Recommendations for 2026

As part of their annual compliance work planning, nursing facilities should consider making an AKS-focused review a “New Year’s resolution.” The 2024 Nursing Facility ICPG provides a timely opportunity to reassess financial relationships and ensure they remain compliant, well-documented, and aligned with OIG expectations. Below are practical, streamlined steps compliance teams can incorporate into their annual review process.

1. Add the ICPG to the Annual Work Plan

Formally allocate time each year to review the Nursing Facility ICPG and discuss implementation strategies with leadership. Treat the guidance as a living compliance roadmap—not a one-time publication.

2. Conduct a Comprehensive Relationship Review

Work collaboratively with clinical leadership, administrators, ordering providers, and procurement teams to conduct a holistic review of relationships with actual and potential referral sources and recipients.  

3. Inventory All Existing Arrangements

Create and maintain a centralized inventory of all contracts and financial relationships, including vendors, ancillary providers, medical directors, consultants, hospitals, and pharmacies.

4. Confirm Safe Harbor or Exception Protection

Determine whether each arrangement was structured to meet an AKS statutory exception or regulatory safe harbor (e.g., discounts, space rental, equipment rental, personal services and management contracts, employment).

5. Revalidate Ongoing Compliance

For arrangements intended to meet a safe harbor, confirm that required conditions still exist:

• Are written agreements consistent with actual performance?
• Is compensation consistent with fair market value (FMV)?
• Are services necessary and actually provided?
• Is documentation (time logs, invoices, delivery records) complete and maintained?

6. Assess Risk for Unprotected Arrangements

If an arrangement was not structured under a safe harbor, evaluate AKS risk using the OIG’s risk-factor questions outlined in the 2024 ICPG, the 2023 General Compliance Program Guidance (GCPG), and the nursing facility-specific considerations in the 2008 Supplemental Compliance Guidance.

7. Modify Arrangements to Achieve Protection

Where feasible, revise existing arrangements to meet a safe harbor. This may include:

• Adjusting compensation to FMV
• Updating contract terms to reflect actual services
• Ensuring services are commercially reasonable and necessary

8. Restructure Free or In-Kind Services

If free goods or services are being provided in connection with referral relationships, consider compliant alternatives. For example:

• Replace free items with discount-based pricing that satisfies the discount safe harbor.
• Structure discharge-support services to meet the care coordination safe harbor.
• Restructure patient benefits to meet the patient engagement and support safe harbor.

9. Scrutinize Swapping Risks

Carefully review arrangements with laboratories, DME suppliers, and other ancillary providers to ensure that pricing for Part A services reflects FMV and is not tied—directly or indirectly—to referrals of separately billable FHCP business.

10. Implement Pre-Screening for New Arrangements

Develop or reinforce a formal review process for all new financial relationships. Whenever possible, structure new arrangements to fully comply with a statutory exception or safe harbor from inception.

11. Review Bed Hold and Reservation Arrangements

Evaluate hospital bed hold or bed reservation agreements to ensure:

• Compliance with CMS requirements
• Payments are not excessive
• Beds are not reserved unnecessarily or already occupied
• Arrangements do not function as disguised referral incentives

12. Strengthen Conflict-of-Interest Oversight

Adopt or reinforce a robust conflict-of-interest disclosure policy requiring clinical and administrative decisionmakers to disclose financial relationships with referral sources or vendors (e.g., long-term care pharmacies). Implement clear procedures for review, mitigation, and documentation of conflicts.

By approaching AKS compliance systematically—through structured inventory, FMV validation, documentation review, and leadership collaboration—nursing facilities can significantly reduce enforcement risk while strengthening the integrity of their operations for the year ahead.