OIG Advisory Opinion 26-11: HHS Inspector General Approves Free Multi-Cancer Screening Report Under Anti-Kickback Statute And Civil Monetary Penalties Law

Key Takeaways

• In Advisory Opinion 26-11, OIG concluded that a precision oncology company’s offer of a free multi-cancer detection report to patients receiving a blood-based colorectal cancer screening test did not warrant administrative sanctions under the federal Anti-Kickback Statute or the Civil Monetary Penalties Law prohibiting beneficiary inducements, even though no safe harbor or statutory exception applied to the arrangement.
• OIG found that the arrangement’s potential clinical benefits to patients, including early detection of cancers with no other recommended screening modality, outweighed fraud and abuse risks, in part because the company imposed safeguards such as neutral educational materials, no provider compensation, no direct-to-consumer advertising, and a defined endpoint tied to FDA approval or Medicare coverage.
• The opinion signals OIG’s willingness to take a pragmatic, facts-and-circumstances approach to innovative diagnostic arrangements involving FDA breakthrough-designated devices, offering guideposts for other healthcare companies considering similar programs that deliver clinical value without increasing costs to federal health care programs.

On May 20, the U.S. Department of Health and Human Services Office of Inspector General (OIG) published Advisory Opinion 26-11, concluding that it would not impose administrative sanctions against a precision oncology company (Requestor) that provides consenting patients a free supplemental, multi-cancer detection report in connection with a blood-based colorectal cancer screening test (the Arrangement). OIG has longstanding concerns about the provision of free items or services to patients and referral sources. In this case, however, OIG determined that the potential benefits to patients outweighed any risks under the federal Anti-Kickback Statute (AKS) or the Civil Monetary Penalties Law provision prohibiting inducements to beneficiaries (the Beneficiary Inducements CMP) and issued a favorable opinion.

What Is the Free Multi-Cancer Screening Arrangement in Advisory Opinion 26-11?

Requestor is a precision oncology company that offers the first and only blood-based biomarker test approved by the U.S. Food & Drug Administration (FDA) for primary colorectal cancer screening (the CRC Screening Test). Although Medicare covers the CRC Screening Test, typically ordered by a patient’s primary care provider once every three years for eligible patients, the test does not yet appear in the U.S. Preventive Services Task Force (USPSTF) Guide to Clinical Preventive Services, which advises routine colorectal cancer screening for individuals between the ages of 45 and 75. Requestor represented that the USPSTF recommendation is framed broadly enough to encompass screening methods such as the CRC Screening Test, but it is not listed because the FDA granted approval for the CRC Screening Test after the Guide was last revised.

Requestor developed an algorithmic analysis that identifies risks for multiple other cancers using the same blood sample drawn for the CRC Screening Test. This algorithm is part of an investigational assay under development for FDA submission and received breakthrough device designation from the FDA in June 2025 as an in vitro diagnostic medical device (the MCD Test). The MCD Test generates information on the detection of several different types of cancer, including bladder, breast, colorectal, esophageal, gastric, liver, lung, ovarian, pancreatic and prostate cancers—types of cancers that account for nearly 400,000 deaths each year in the U.S. and approximately 64% of all cancer-related deaths.

What Are the Eligibility Requirements and Safeguards for the Free Supplemental Report?

Under the Arrangement, Requestor provides consenting patients—including federal healthcare program enrollees—a free supplemental report detailing the MCD Test results in addition to the CRC Screening Test results (the Supplemental Report).

To be eligible to receive a Supplemental Report, the following conditions must be met:

• The patient must have a valid order for the CRC Screening Test from an independent physician who is unaffiliated with Requestor.
• The ordering physician must opt in to receive results for cancers beyond colorectal cancer.
• The patient must consent to receive the Supplemental Report and participate in a data collection initiative.

Requestor certified that the data collection initiative supports evaluation of the clinical utility of the Supplemental Report and its application for FDA approval and future payor coverage.

Physicians are not compensated for ordering the CRC Screening Test or for opting in to receive the Supplemental Report, and the Supplemental Report is available to any physician who orders the CRC Screening Test, regardless of the physician’s volume or value of referrals. Requestor does not actively market the Supplemental Report as a benefit to providers, does not engage in direct-to-consumer advertising for the Supplemental Report, and makes information about the Supplemental Report available to physicians only through pre-approved materials written in a neutral and objective tone.

The Arrangement will continue until the MCD Test is approved by the FDA or is covered by Medicare under a National Coverage Determination.

How Did OIG Analyze the Anti-Kickback Statute and Beneficiary Inducements CMP Risks?

OIG concluded that the Arrangement implicates both the AKS and the Beneficiary Inducements CMP because the Supplemental Report constitutes remuneration, in the form of a valuable service provided at no cost, that could induce a patient to select the CRC Screening Test, and by extension, Requestor’s laboratory.

OIG noted that no AKS safe harbor applies and that the “Preventive Care Exception” to the Beneficiary Inducements CMP does not apply because neither the CRC Screening Test nor the MCD Test is listed in the USPSTF’s Guide to Clinical Preventive Services.

Despite its longstanding concerns about the offer of free items or services, OIG concluded that the potential benefits to patients outweighed the risk of fraud and abuse for the following reasons:

• It is unlikely to result in overutilization or inappropriate utilization. The Supplemental Report is available only to patients who already are eligible for the CRC Screening Test and who have a valid order from an independent physician who is not affiliated with the Requestor. Moreover, the MCD Test is not reimbursable, is performed on the same blood sample drawn for the CRC Screening Test (meaning it does not result in increased cost to federal healthcare programs), and provides information about several types of cancer for which there is no other USPSTF-recommended screening test, potentially giving patients critical health information and leading to earlier treatment.
• It is unlikely to skew clinical decision-making. OIG recognized that providers consider a number of factors when deciding whether to order a CRC Screening Test, including patient eligibility, willingness to engage in follow-up care if there is a positive result, performance characteristics of the test compared to alternatives and cost. Here, Requestor discloses limitations on both the CRC Screening Test and the MCD Test to providers and patients; does not compensate physicians for ordering the test; does not engage in targeted marketing for the Supplemental Report and provides information to physicians only through neutral, pre-approved materials.
• It is unlikely to result in inappropriately steering or unfair competition. Requestor’s laboratory is the only laboratory that performs the CRC Screening Test, so any time the test is ordered, the Requestor’s laboratory is automatically selected regardless of the Arrangement. Additionally, for six of the cancers detected by the MCD Test, there is currently no USPSTF-recommended screening test, meaning there is limited risk of disadvantaging other laboratories and a higher benefit to early detection for patients.

What Does OIG Advisory Opinion 26-11 Mean for Healthcare Companies Offering Free Diagnostic Services?OIG issued a favorable opinion even though the Arrangement does not satisfy the requirements of any safe harbor or statutory exception. OIG’s willingness to look past this deficit reflects a pragmatic approach to thoughtfully designed arrangements that aim to advance clinical value and patient care without resulting in over-utilization or increased costs to federal healthcare programs.

This opinion signals OIG’s openness to innovative diagnostic arrangements—particularly those involving emerging technologies that have received breakthrough device designation from the FDA and address unmet clinical needs. OIG appeared to place significant weight on the fact that the Supplemental Report could deliver critical health information to patients for cancers that otherwise would go undetected through currently recommended screening modalities.

OIG also appeared to rely heavily on the limited marketing and absence of provider compensation. Companies considering similar arrangements should consider those safeguards and take note that OIG emphasized the neutral tone of Requestor’s educational materials, the absence of direct-to-consumer advertising and the lack of any incentive structure tying the Supplemental Report to referral volume.

Finally, the duration of the Arrangement—continuing only until FDA approval of the MCD Test or Medicare coverage under a National Coverage Determination—likely provided additional comfort to OIG that the free offering would not persist indefinitely as a market advantage.

As with all advisory opinions, the applicability of Advisory Opinion 26-11 is limited to the Requestor and the specific facts and circumstances presented. However, it offers guideposts for other healthcare companies considering similar arrangements, who should carefully evaluate how their specific facts align with the factors OIG found persuasive here and consult with experienced healthcare regulatory counsel before proceeding.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.