Anti-Kickback Statute and RPM: Compliance Rules for Device Programs and Vendor Relationships

Where the Anti-Kickback Statute Intersects with RPM

The federal Anti-Kickback Statute (AKS) makes it a criminal offense to knowingly offer, pay, solicit, or receive anything of value to induce or reward referrals for services covered by federal healthcare programs. It is one of the most powerful fraud and abuse statutes in healthcare law, and it applies to RPM programs in ways that many primary care practices do not fully appreciate.

RPM creates AKS exposure because it involves giving patients devices, contracting with vendors who have financial interests in patient enrollment, and sometimes partnering with other providers in ways that tie compensation to referral volume. Each of these arrangements can implicate the AKS if not structured carefully.

This guide covers the specific AKS risks in RPM, the OIG safe harbors that can protect your practice, and the practical dos and don’ts for device programs and vendor relationships.

AKS Fundamentals for RPM Programs

The AKS is an intent-based statute. It does not require that the arrangement actually result in improper referrals — it is enough that one purpose of the arrangement is to induce referrals. This “one purpose” test (established by the Supreme Court in United States v. Greber) means that even arrangements with legitimate business purposes can violate the AKS if inducing referrals is one of the motivations.

Key AKS Elements Relevant to RPM

Element	Application to RPM
”Anything of value”	Includes RPM devices provided to patients, discounts, free services, and below-market vendor pricing
”Induce or reward”	Providing devices or services to encourage patients to remain enrolled, or to encourage referrals from other providers
”Referrals”	Patient enrollment in RPM, referrals from specialists, and ordering of RPM services
”Federal healthcare program”	Medicare, Medicaid, TRICARE — the programs that reimburse RPM services
Intent	At least one purpose of the arrangement must be to induce referrals

Critical distinction: The AKS applies to relationships in both directions — giving something of value to patients to induce them to use your RPM services, and giving or receiving something of value from vendors or other providers in connection with RPM referrals.

OIG Safe Harbors That Protect RPM Arrangements

The Office of Inspector General (OIG) has established regulatory safe harbors that, if fully satisfied, provide complete protection from AKS prosecution. No safe harbor was designed specifically for RPM, but several apply to common RPM arrangements.

Relevant Safe Harbors

Personal Services and Management Contracts (42 CFR 1001.952(d))

This is the most commonly used safe harbor for RPM vendor relationships. It protects arrangements where:

• There is a written agreement signed by both parties
• The agreement covers all services the vendor will provide
• The term is at least one year
• Compensation is set in advance, consistent with fair market value, and not determined by volume or value of referrals
• The services do not involve counseling or promotion of illegal activity

Equipment Rental (42 CFR 1001.952(c))

Relevant when practices lease RPM monitoring devices or platforms. Requirements include:

• Written agreement for at least one year
• Rental charges set in advance at fair market value
• Equipment identified in the agreement
• Charges not adjusted based on referral volume

Warranties (42 CFR 1001.952(g))

May apply when device manufacturers provide warranties that include replacement devices or extended service. The warranty must be disclosed to the buyer and, where applicable, to CMS.

Safe Harbor Compliance Checklist

Safe Harbor Requirement	How to Satisfy in RPM Context
Written agreement	Execute a detailed vendor contract before services begin
Fair market value compensation	Obtain a FMV opinion from an independent valuator for significant arrangements
Fixed in advance	Set pricing that does not vary with patient enrollment numbers or referral volume
Commercially reasonable	The services must serve a legitimate business purpose independent of referral generation
Not volume-based	Per-patient-per-month pricing is common and acceptable if it reflects FMV for actual services — but watch for tiered pricing that rewards enrollment growth

Device Gifting Rules: The Highest-Risk Area

Providing RPM devices to Medicare beneficiaries is the single highest AKS risk in most RPM programs. The device has economic value, and giving it to a patient who will generate billable RPM revenue creates an argument that the device is inducement.

When Device Provision Is Permissible

Device provision is generally acceptable when:

• The device is medically necessary for the patient’s care
• The physician has ordered the device as part of the patient’s RPM care plan
• The device remains the property of the practice (loaned, not gifted)
• The patient does not receive anything of value beyond what is necessary for their clinical monitoring
• The practice does not market the free device as a reason to enroll

When Device Provision Creates AKS Risk

Scenario	Risk Level	Analysis
Practice loans glucose monitor to enrolled diabetic patient	Low	Medically necessary, part of care plan, practice retains ownership
Practice gives patient a high-end smartwatch with RPM capabilities	High	Value exceeds clinical necessity; consumer device with personal use value
Practice advertises “free devices” to attract new Medicare patients	Very High	Device used as marketing inducement to generate federal healthcare program referrals
Vendor provides devices to the practice at no cost	High	Below-market pricing may constitute remuneration to induce use of vendor’s platform and generate referrals
Practice allows patient to keep device after RPM disenrollment	Medium	Could be viewed as a gift of value in exchange for prior participation

Safe approach for device programs: Structure your device program as a loan. The practice purchases or leases the devices, loans them to patients for the duration of their RPM enrollment, retains ownership throughout, and retrieves or deactivates devices when the patient disenrolls. Document the loan arrangement in your patient consent form.

The Beneficiary Inducement Statute (CMP)

Separate from the AKS, the Civil Monetary Penalties (CMP) law at 42 USC 1320a-7a(a)(5) prohibits offering remuneration to Medicare or Medicaid beneficiaries to influence their selection of a provider, practitioner, or supplier. The OIG has established a nominal value exception — items or services valued at $15 or less individually, not exceeding $75 in aggregate per patient per year.

RPM devices almost always exceed these thresholds, which means the nominal value exception does not protect device provision. The device must be justified as a medically necessary item provided as part of the treatment plan, not as an inducement.

Vendor Relationship Dos and Don’ts

RPM vendor relationships create AKS exposure because the vendor has a direct financial interest in patient enrollment. More enrolled patients means more revenue for the vendor, creating an incentive structure that the OIG views with suspicion.

Dos

Do set vendor compensation at fair market value. The single most important protective step. Compensation that is above FMV is presumed to include a referral component. Compensation below FMV from the vendor to the practice (e.g., deeply discounted devices or services) is presumed to be an inducement.

Do use fixed compensation structures. Per-patient-per-month fees are acceptable if they reflect FMV for actual services. Flat monthly fees that do not vary with enrollment are even safer. Avoid percentage-of-collections arrangements where the vendor earns a share of RPM billing revenue — this directly ties vendor compensation to referral volume.

Do maintain a written agreement. The agreement must specify all services, compensation terms, and duration. It should be signed before services begin, not after.

Do ensure commercial reasonableness. Every service the vendor provides must serve a legitimate business purpose. If you are paying for services you do not actually use or need, the excess payment may be characterized as disguised referral compensation.

Do conduct due diligence on your vendor. Check the OIG exclusion list (LEIE), verify the vendor’s compliance program, and understand their business model. If the vendor’s revenue depends primarily on enrollment volume rather than service quality, scrutinize the relationship carefully.

Don’ts

Don’t accept free devices from vendors without a clear FMV justification. If a vendor provides devices at no cost, ask why. If the business rationale is that device costs are recovered through the platform subscription, get that documented. If the rationale is unclear, assume the free devices are remuneration.

Don’t let vendors market directly to your patients. Your RPM enrollment decisions should be based on clinical judgment, not vendor-driven marketing. If the vendor is contacting your patients to encourage enrollment, you have a control problem and potentially an AKS problem.

Don’t tie vendor compensation to enrollment targets. Bonus payments for reaching enrollment milestones, volume-based pricing tiers that reward growth, and shared savings arrangements based on billing revenue all create AKS risk.

Don’t let vendors make clinical decisions. If the vendor’s staff are determining which patients should be enrolled, interpreting clinical data, or recommending treatment changes, the vendor is functioning as a referral source, not a technology provider.

Don’t accept patient referrals from your vendor. If the vendor identifies potential RPM patients and refers them to your practice, this creates a referral relationship that the AKS was designed to address.

Free Device Programs: A Detailed Analysis

“Free device” programs are common in the RPM market, and their AKS compliance depends entirely on how they are structured.

Common Free Device Program Structures

Structure 1: Vendor bundles device cost into monthly subscription The practice pays a monthly per-patient fee that includes device provision, data platform, and clinical support. The device is not separately priced, but its cost is incorporated into the subscription.

AKS Analysis: Generally lower risk if the total subscription price reflects FMV. The key question is whether the bundled price is consistent with what similarly situated parties would negotiate in arm’s-length transactions.

Structure 2: Vendor provides devices free with minimum enrollment commitment The vendor gives devices at no charge in exchange for the practice committing to a minimum number of RPM enrollments.

AKS Analysis: Significant risk. The minimum enrollment commitment ties device provision to referral volume. This structure makes it difficult to argue that the devices are not inducement for referrals.

Structure 3: Device manufacturer provides devices directly to patients The manufacturer distributes devices through a program that does not involve the prescribing physician or practice in the distribution decision.

AKS Analysis: May implicate the AKS if the manufacturer’s program is designed to drive utilization of RPM services that the manufacturer benefits from (e.g., through platform licensing fees). The manufacturer’s intent matters.

Practice manager action item: Map out every source of value flowing between your practice, your RPM vendor, device manufacturers, and your patients. Draw it as a diagram. If value flows correlate with referral patterns, you have potential AKS exposure that needs legal review.

Referral Arrangement Pitfalls

RPM programs sometimes involve arrangements with other providers that create referral-related AKS risks.

Common Referral Pitfalls

Specialist-to-primary-care referrals for RPM enrollment An endocrinologist refers diabetic patients to your primary care practice specifically for RPM enrollment. If the endocrinologist receives any compensation, fee-sharing, or benefit from these referrals, the arrangement violates the AKS.

Hospital-to-practice RPM transitions A hospital discharge program refers patients to your practice’s RPM program. If the hospital provides funding, devices, or staff support for your RPM program, the arrangement must be analyzed for AKS compliance. The hospital benefits from reduced readmissions, which creates a financial interest in the referral.

Practice-to-practice monitoring arrangements A smaller practice without RPM infrastructure refers patients to your practice for monitoring. If you compensate the referring practice for these referrals (including through above-FMV payments for any services), the AKS is implicated.

Structuring Compliant Referral Relationships

Arrangement Element	Compliant Approach	Non-Compliant Approach
Compensation	Fixed, FMV, not tied to referral volume	Per-referral fees, bonuses for enrollment targets
Marketing	Clinical staff make enrollment decisions independently	Referring providers incentivized to push enrollment
Documentation	Written agreements specifying all terms	Informal handshake arrangements
Clinical rationale	Each referral based on documented medical necessity	Blanket enrollment of all referred patients

Building an AKS Compliance Program for RPM

An effective AKS compliance program for your RPM operations should include these components:

1. Written policies addressing device provision, vendor relationships, and referral arrangements
2. Annual training for all staff involved in RPM enrollment and vendor management
3. Vendor contract review by compliance counsel before execution
4. FMV documentation for all significant vendor compensation arrangements
5. Periodic audits of device inventory, vendor payments, and referral patterns
6. A reporting mechanism for staff to raise AKS concerns without fear of retaliation
7. Prompt investigation and remediation of identified issues

Zayd Health builds AKS-aware compliance controls into its RPM platform, helping primary care practices maintain compliant vendor relationships and device programs as they scale their diabetic patient monitoring.

The AKS is a strict statute with severe penalties — up to $100,000 per violation, criminal fines, and exclusion from federal healthcare programs. But it is also a manageable risk for practices that structure their RPM programs with compliance as a design principle rather than an afterthought. Fair market value, written agreements, clinical independence, and transparent arrangements are not just legal requirements — they are good business practices that protect your RPM program for the long term.