The OIG's Opinion On Warehouse Club Programs

Law360 (January 15, 2008, 12:00 AM EST) -- The Office of Inspector General ("OIG") predicted in a 2003 Fraud Alert that it would issue favorable advisory opinions in the area of inducements to beneficiaries "only in situations involving conduct that is very close to an existing statutory and regulatory exception." Nonetheless, on Aug. 21, 2007, it issued an unexpectedly favorable opinion on an arrangement not even close to an existing exception.

The request for an advisory opinion was submitted by a company that operates membership warehouse clubs ("Warehouses") that sell a wide range of...
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