• A therapy provider established and funded a nonprofit foundation to offer need-based grants to families of children in specialized therapy.
• The independently operated foundation applied uniform and objective eligibility criteria and offered grants regardless of a family’s therapy provider.
• The Office of Inspector General (OIG) for the U.S. Department of Health and Human Services found the structure posed low risk of fraud or abuse and would not trigger administrative sanctions under the federal Anti-Kickback Statute or Beneficiary Inducements Civil Monetary Penalty (CMP).

What Was Proposed

A company delivering “family-powered” therapy for children with a specific disorder launched a nonprofit foundation to help families overcome financial and practical barriers to access therapy. Although therapy is often covered by insurance, families still face cost-sharing obligations and may need to reduce work hours to support treatment. 

To address this, the foundation — initially established with support from company employees but now fully independent — offers tiered, needs-based grants to families who meet three conditions:

• The family’s income is within the foundation’s specified limits;
• The family’s child is receiving family-powered therapy from any eligible therapy provider (not necessarily the company); and
• The family is not receiving similar compensation from other sources.

Why Did OIG Approve?

Federal Anti-Kickback Statute: OIG examined whether the company’s contributions (time, money, set-up assistance) or the foundation’s grants could improperly induce use of the company’s services or federal healthcare program business. OIG found that several safeguards were in place to minimize risk:

• No Tying of Grants to Provider Choice: Grants are available to families regardless of the therapy provider.
• Foundation Independence: The foundation is managed independently, with board-approved policies subject to outside counsel review.
• No Unfair Steering or Volume Incentives: Grants do not depend on referrals, use of company services, or exclusive arrangements.
• Transparency: The foundation maintains clear eligibility and reporting procedures.

Beneficiary Inducements CMP: OIG further determined the grants are unlikely to improperly influence families’ choice of therapy provider, as grants are based on need, are indifferent to provider, and go directly to families to offset therapy-related costs.

Why It Matters

OIG Advisory Opinion 25-10 affirms that a carefully structured charitable grant program for patients or families funded by a healthcare provider may be permissible under fraud and abuse laws when:

• The foundation and its grantmaking are truly independent from the donor organization;
• Eligibility and grant terms are transparent, need-based, and uniformly applied; and
• No incentives are tied to referrals, provider choice, or federal program business.

Reminder: OIG’s opinion is limited to the specific facts and parties at issue. Any material changes or undisclosed facts could render the opinion void, and it is not automatically applicable to different structures or arrangements.

For organizations exploring charitable support programs, this advisory opinion demonstrates both the value of robust guardrails and the need for thorough legal review before launching any program benefiting patients or families tied to federal healthcare programs.