Home Care Agencies and Sign-On Bonuses: Understanding the Recent Advisory Opinion of HHS’s Office of Inspector General

Quick Hits

• On December 30, 2025, HHS’s OIG issued Advisory Opinion No. 25-12, determining that home care agencies’ proposed sign-on bonuses for prospective caregivers, who are often family members of Medicaid participants, constituted impermissible remuneration under the federal Anti-Kickback Statute and potentially violated the Beneficiary Inducements Civil Monetary Penalty provision.
• The OIG found that the proposed sign-on bonuses, advertised without eligibility criteria, created an “inextricable link” between caregivers and client referrals, effectively acting as upfront payments to influence the selection of home care agencies based on financial incentives rather than care quality.
• Based on the OIG’s advisory opinion, home care agencies may want to review their recruitment and marketing materials for advertisements of sign-on bonuses tied to client referrals and consider alternative arrangements.

The Proposed Arrangement

The entities requesting an opinion from the OIG each operate a home care agency where eligible clients, who are Medicaid recipients, can select attendants to provide home care services. The home care agency submits claims for services performed by the attendants to the State Medicaid program and receives payment for those services. Typically, the client’s attendant is a family member.

To remain competitive, the home care agency proposed marketing a sign-on bonus to prospective attendants. The bonus would be advertised only as the amount, without any criteria for eligibility.

The OIG’s Analysis

Based on the requesting party’s specific factual scenario, the OIG determined that the proposed arrangement implicated the AKS and Beneficiary Inducements CMP and that it failed to satisfy any of the AKS safe harbor provisions. The OIG determined that there was an “inextricable link” between prospective attendants and the referral of new clients, especially when the attendant would have influence over the home care agency that the attendant’s family member would select. Further, the OIG viewed the advertisement of the sign-on bonus as functionally a solicitation for referrals. Specifically, the OIG held that the bonus advertisements were effectively upfront payments and, therefore, an enticement for attendants to select home care agencies based on financial incentives rather than the quality of care. The OIG further expressed its concern that market competition would incentivize home care agencies “to offer increasingly higher sign-on bonuses” and divert resources from being invested in the quality of services rendered. Ultimately, the OIG issued an unfavorable opinion, concluding that the proposed arrangement constituted prohibited remuneration.

Key Takeaways

Home care agencies with clients who are Medicaid participants will likely want to ensure that any bonuses for the purposes of recruiting attendants are not connected to, directly or indirectly, client referrals. Notably, AO 25-12 is based on a specific set of facts provided by the requesting parties and should not be viewed as an endorsement of marketing tactics for other types of bonuses.

Depending on a home care agency’s specific needs and circumstances, the following options may be considered as viable alternatives to the proposed arrangement analyzed by the OIG:

• Sign-on bonuses paid to attendants who are not connected to a potential client. Understanding whether this could implicate the AKS would require a case-by-case examination of the level of influence a prospective attendant would have over potential clients.
• Sign-on bonuses paid to prospective attendants with respect to clients who are not Medicaid participants. However, employment compensation arrangements that are not standardized could trigger other healthcare and employment law-related concerns.
• Bonuses paid after hiring that are not advertised or offered (or understood to be available) prior to hiring.
• Bonuses paid after hiring that are advertised prior to hiring but clearly state the conditions of payment, provided that those conditions have nothing to do with incentivizing a prospective attendant to bring along a client over whom they have influence.

Importantly, any type of arrangement that could implicate the AKS should be reviewed before implementation. The bonuses discussed in AO 25-12 are only one kind of the many marketing tactics that, while generally considered industry norms in other sectors, may run afoul of the AKS.

Ogletree Deakins’ Healthcare Industry Group and Whistleblower and Compliance Practice Group will continue to monitor developments and provide updates on the Healthcare and Ethics / Whistleblower blogs as additional information becomes available.

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