A telehealth platform that pays a marketing company or a prescribing physician based on how many patients convert into paid visits is running directly into the federal Anti-Kickback Statute, 42 U.S.C. Section 1320a-7b(b). The statute makes it a felony to knowingly and willfully offer, pay, solicit, or receive anything of value to induce referrals of business reimbursable under Medicare, Medicaid, or another federal health care program. Referral fees, per-consult marketing payments, and revenue-share arrangements between telehealth companies and the prescribers or pharmacies they route patients to are exactly the remuneration the statute targets, and OIG has told the industry so directly.
How Referral Fees Trigger the Anti-Kickback Statute
Telehealth business models often pay a marketing company a fee scaled to how many patients complete an intake, a prescription, or a paid subscription. When federal health care program reimbursement sits anywhere downstream, whether a pharmacy bills Medicare Part D for the resulting prescription or the visit itself bills Medicare, the arrangement counts as remuneration for referrals under the statute. The government need only show one purpose of the payment was to induce referrals, not that it was the only purpose. Calling the payment a marketing fee or a technology license fee does not change the analysis; OIG and DOJ look at what the payment actually rewards.
The Personal Services and Management Contracts Safe Harbor
The safe harbor most telehealth arrangements try to fit inside is the personal services and management contracts safe harbor at 42 CFR Section 1001.952(d). To qualify, the arrangement must be a written agreement signed by both parties, run for a term of not less than one year, and set a compensation methodology in advance that is consistent with fair market value in an arm's-length transaction. That methodology cannot account for the volume or value of referrals or other business generated between the parties that is reimbursable under a federal health care program.
A marketing fee that rises with the number of patients who convert into billed telehealth visits is compensation based on referral volume, and no safe harbor protects it.
Why Per-Consult and Per-Lead Fees Usually Fail It
The compensation structures common in telehealth marketing, a fee per completed consult, a fee per prescription written, a percentage of the revenue a prescriber or pharmacy generates, are the fact pattern the safe harbor was written to exclude. OIG's July 2022 Special Fraud Alert on telemedicine arrangements listed compensation tied to the volume of items or services ordered or prescribed as one hallmark of a suspect arrangement, alongside patient recruitment run by the telehealth company itself and practitioners given no meaningful chance to evaluate the patients they are prescribing for. The same day, the Department of Justice charged 36 defendants across 13 federal districts over more than $1.2 billion in fraudulent telemedicine, genetic testing, and durable medical equipment billing, much of it built on exactly this compensation model.
Structuring a Compliant Marketing Arrangement
A telehealth company that wants a marketing arrangement to survive scrutiny needs to fix the fee before the relationship starts, document how that number was set independent of expected referral volume, and put it in a signed agreement running at least a year. Flat monthly fees for defined services, and independently benchmarked fair-market-value rates, fit inside the safe harbor; a rate card that pays more per patient who becomes a paying customer does not, regardless of what the contract calls it. The same discipline applies to prescribers and pharmacies: a per-script payment invites the same exposure as a per-lead marketing fee. Claims submitted under a kickback-tainted arrangement can also expose the company to False Claims Act liability, since a claim resulting from an Anti-Kickback Statute violation is a false claim under the FCA, and to recoupment demands once a payer identifies the pattern.
Why Early Legal Counsel Is Critical
It is critical that telehealth companies retain experienced healthcare defense counsel before finalizing a marketing, provider-recruitment, or revenue-share arrangement, not after a subpoena or audit notice arrives. Early legal review can determine whether a proposed fee structure fits the safe harbor, correct a compensation formula before it is memorialized in a signed contract, and preserve the fair-market-value documentation that regulators and prosecutors look for first. Waiting until OIG or DOJ has already opened an inquiry leaves far less room to fix the structure.
How Health Law Alliance Can Help
Health Law Alliance has represented 2,500+ clients across healthcare regulatory and fraud defense matters over 25+ years, including telehealth companies structuring provider and marketing relationships under the Anti-Kickback Statute. Our telehealth law and telemedicine attorneys review referral and marketing agreements, rebuild compensation structures to fit the safe harbor, and defend telehealth companies and prescribers once OIG, DOJ, or a Medicaid Fraud Control Unit has opened an inquiry. Contact Health Law Alliance for a free, confidential consultation before you sign, or expand, a telehealth marketing arrangement.
