OIG Issues Favorable Opinion to Colorectal Cancer Screening Test Manufacturer

The Department of Health and Human Services Office of Inspector General (OIG) recently released its first Advisory Opinion of 2026, Advisory Opinion 26-01, concluding that a device manufacturer’s proposal to waive cost-sharing obligations for certain commercially insured patients who receive its FDA-approved colorectal cancer screening test would not generate prohibited remuneration under the Anti-Kickback Statute (“AKS”) or the Beneficiary Inducements Civil Monetary Penalty law (“CMP”).

 Although OIG has historically expressed concern about “carve‑out” arrangements that waive cost sharing for commercially insured individuals while preserving federal program obligations, OIG viewed this proposal as factually distinct based on the test’s limited federal program coverage and the absence of remuneration to ordering providers.

Current Landscape: Colorectal Cancer Screening Tests, Industry Recommendations, and Coverage

The entity that requested the advisory opinion manufactures a non-invasive, stool-based RNA clinical laboratory test for colorectal cancer screening, approved by the U.S. Food & Drug Administration (“FDA”) in 2024 and currently the only test of its kind for adults aged 45 and older at average risk for colorectal cancer.

The U.S. Preventative Services Task Force (“USPSTF”) recommends colorectal cancer screening for adults aged 45 and older who lack certain diagnoses and/or family medical history that would indicate a predisposition to a “high lifetime risk” of colorectal cancer. USPSTF classifies these screening recommendations into grades A or B, for adults aged 50 – 75 years and 45 – 49 years respectively, and grade “C” for adults aged 76 – 85 years depending on overall health, prior screening, and patient preference. USPSTF also provides evidence-backed information about available screening modalities, including various stool-based tests. Because the requestor’s test is FDA-approved for adults age 45 and older, it would likely qualify for a grade A or B recommendation under USPSTF’s guidelines. However, USPSTF’s colorectal cancer screening guidelines have not been updated since 2021, meaning the test is not yet recognized or recommended, and may not be for several years. 

Inclusion in USPSTF guidelines matters because commercial health insurers must cover grade A and B preventative services without cost sharing. Without inclusion, commercial health programs could impose cost-sharing obligations between $100 and $135 on patients who receive the requestor’s test—but not on patients who receive tests already included in USPSTF’s recommendations. Federal health care program coverage is even more limited. Only a handful of Medicaid fee-for-service programs and Medicaid Managed Care Organizations (“MMCOs”) currently cover the requestor's test.

The proposed arrangement governed by this advisory opinion would waive cost-sharing amounts for commercially insured individuals who receive the requestor's test but do not qualify for a financial assistance program sponsored by the test manufacturer. This waiver would apply uniformly, regardless of ordering provider, and would not be tied to any other health care item or service. It would also terminate once USPSTF updates its screening guidelines to include the test, regardless of the recommendation grade assigned. 

OIG’s Analysis

The AKS prohibits offering or receiving remuneration to induce referrals for items or services reimbursable by Federal healthcare programs. The CMP prohibits offering remuneration that could influence a Federal health care beneficiary’s selection of a provider or supplier in order to receive items or services reimbursable, wholly or in part, by Federal health care programs. 

OIG found no remuneration to implicate the AKS or CMP because the cost-sharing waiver applies to a limited patient population: commercially insured individuals who do not qualify for financial assistance. Thus, no claim for the test would be submitted to a Federal healthcare program. In a footnote, OIG acknowledged that a cost‑sharing waiver might theoretically enable ordering providers to bill for additional services. But because any such services would be reimbursed by commercial insurers only, this possibility did not create AKS risk. 

Even where a commercially insured patient has secondary Federal coverage, OIG accepted the requestor’s certification that it would not bill Federal programs in these situations. OIG did recognize that a commercial insurer might automatically bill a Federal health care program as a secondary, even if the requestor does not. But, given limited Federal coverage, such claims would almost certainly be denied. In the unlikely event that a state fee-for-service Medicaid program covering the test were billed, the requestor’s provider enrollment agreements prohibit collecting cost sharing from Medicaid beneficiaries. As to MMCO program beneficiaries, Requestor certified that these patients already qualify for financial assistance based on their income, so if an MMCO covering the test were billed, the requestor’s financial assistance policy would waive any cost-sharing responsibilities. 

While OIG’s favorable opinion here seems to contrast its “longstanding and continuing concerns” about carve out arrangements affecting Federal health care program business, it emphasized the “unique circumstances” at hand, including extremely limited Federal coverage, multiple safeguards preventing Medicare and Medicaid reimbursement, and the fact that the “[r]equestor would not offer or pay any remuneration to any ordering prescriber” under the proposed arrangement. OIG expressly restricted the opinion to the requestor’s specific facts and cautioned that its conclusion cannot be relied upon by any other party. The opinion also does not extend to the Stark Law or any other Federal, State, or local rule or regulation.

Key Takeaways

• Federal program exposure matters. Where federal coverage is extremely limited or nonexistent, OIG may view commercial‑only waivers more favorably.
• No provider remuneration = lower risk. Absence of financial benefit to ordering providers was central to OIG’s analysis.
• Uniformity is critical. The waiver applied to all commercially insured patients, regardless of ordering provider, reducing inducement risk.
• Carve‑out concerns persist. Despite the unique circumstances in this case, OIG reiterated that arrangements which carve-out referrals to Federal health care programs implicate, and may violate, the AKS.
• Temporary waivers tied to USPSTF updates may be permissible. The sunset provision on the proposed arrangement likely supported OIG’s favorable view.

Reed Smith will continue to track developments with regard to fraud and abuse enforcement and OIG advisory opinions. If you have any questions about this opinion or would like to seek an advisory opinion of your own, please do not hesitate to reach out to the author or to your health care lawyers at Reed Smith.