October 2014
Practice Group:
Health Care
A Possible Green Light for Patient Transportation
Services: OIG Proposes Revised Safe Harbors to the
Anti-Kickback Statute for Health Care Providers
By Amy O. Garrigues, Amy L. Mackin, and Kelsey U. Jernigan
On October 3, 2014, the Office of Inspector General of the Department of Health and Human
Services (“OIG”) published a proposed rule and request for comments (“Proposed Rule”),
which would amend the Anti-Kickback Statute (“AKS”) safe harbors, most notably to allow
certain health care providers to offer free or discounted transportation services to their
patients.1 Comments to the Proposed Rule are due no later than 5 p.m. Eastern Standard
Time on December 2, 2014.
Note that the Proposed Rule also addresses the Civil Monetary Penalties Law, which is the
subject of another K&L Gates Alert to follow.
Proposed Safe Harbor for Free or Discounted Transportation Services
The federal AKS makes it a crime to knowingly or willfully offer, pay, solicit, or receive
remuneration in order to induce or reward the referral of business reimbursable under federal
health care programs. However, the Secretary of Health and Human Services has
promulgated “safe harbors” protecting certain payment and business practices from
prosecution under the AKS. Consistent with prior subregulatory guidance, the Proposed
Rule would establish a new safe harbor to protect free and discounted local transportation
services provided to beneficiaries of federal health care programs.
The OIG proposed to define “Eligible Entities” for purposes of this safe harbor as “any
individual or entity, except for … [those] that primarily supply health care items” such as
durable medical equipment and pharmaceuticals, as well as family members and agents of
these suppliers.2 In commentary, the OIG also proposed to exclude clinical laboratories from
being Eligible Entities. Citing concerns about home health providers in particular, the OIG
also requested comment on whether health care providers should be excluded from using
this safe harbor if free transportation is provided to their referral sources. Noting that this
potential restriction could be problematic for “health systems, health plans, accountable care
organizations, or other integrated networks of providers and suppliers,” though, the OIG
specifically requested comments from these entities.3
The Proposed Rule also includes the following requirements:
•
1
Eligible Entities could only provide transportation services to established patients
(i.e., not new patients) in order to obtain medically necessary items and services. If
Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback
Statute; and Civil Monetary Penalty Rules Regarding Beneficiary Inducements and Gainsharing: Proposed Rule, 79 Fed.
Reg. 59717 (Oct. 3, 2014).
2
Id. at 59732.
3
Id. at 59723.
A Possible Green Light for Patient Transportation Services:
OIG Proposes Revised Safe Harbors to the Anti-Kickback
Statute for Health Care Providers
necessary, the Eligible Entity could also transport a family member or other person
assisting the patient.
•
Services would have to be determined in a manner unrelated to the past or
anticipated federal health care program business
o
For example, the Eligible Entity would not be allowed to limit the services to
only patients who were referred from particular sources. Likewise, the
Eligible Entity could not make the transportation offer contingent on a patient
seeing a particular provider who is a referral source of the Eligible Entity.
o
However, the Proposed Rule would expressly allow Eligible Entities to place
limitations on the furnishing of transportation, as long as such limitations
were unrelated to the value or volume of referrals (e.g., a mileage limit or a
limit on the number of trips offered).
o
The Proposed Rule would require that the availability of the services not be
based on the type of treatment a patient might receive (e.g., it could not be
limited to cancer patients receiving only the treatment with the highest
reimbursement). However, a transportation program could be restricted to
patients whose conditions require frequent or critical appointments and who
do not have reliable transportation. In this regard, the Proposed Rule
expressly states that offering transportation based solely on the number of
appointments and without consideration of the patient’s need for
transportation raises the possibility that the offer is based on the volume of
federal health care program business and, thus, would not be protected.
•
The transportation methods could not include air, luxury, or ambulance
transportation. The Proposed Rule does not differentiate between emergency and
non-emergency use of an ambulance vehicle.
•
The transportation services could not be publicly advertised or otherwise marketed to
patients or other potential referral sources, and no marketing of health care items or
services could occur during the course of the transportation (other than simple
signage). Additionally, Eligible Entities would not be allowed to compensate drivers
or others involved in arranging the transportation on a per-rider basis.
•
Only local transportation services could be provided. The Proposed Rule defines
“local” to mean that the patient is transported no more than 25 miles. The OIG also
requested suggestions for alternative methods of determining whether the
transportation is considered “local,” particularly for rural or underserved areas.
•
Eligible Entities would have to bear the costs of the free or discounted local
transportation services and could not shift the burden of these costs onto state or
federal health care programs, other payors, or individuals. Safe harbor protection
would not be available if the Eligible Entity providing the transportation and a
destination provider had any referral agreement tied to the transportation. “For
example, if an ambulance supplier had an agreement with a hospital to provide
certain free transports to hospital outpatients (e.g., via van service) in exchange for
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A Possible Green Light for Patient Transportation Services:
OIG Proposes Revised Safe Harbors to the Anti-Kickback
Statute for Health Care Providers
receiving the hospital’s transports that are payable by Medicare Part B, the free
transportation would not be protected.”4
The Proposed Rule also solicits comments on (i) whether Eligible Entities should be allowed
to provide transportation for non-medical purposes that are related to the patient’s health
care (e.g., transportation to a government benefits office, social service agency, or grocery
store), and (ii) whether the safe harbor should separately protect Eligible Entities providing
transportation in the form of a bus or van service on a regular route that serves
neighborhoods, public locations, and health care providers.
Additional Safe Harbors and Amendments
The Proposed Rule also seeks to add new safe harbors to protect the following
arrangements, which generally correspond to existing statutory language:
•
Certain pharmacy cost-sharing waivers for financially needy Medicare Part D
beneficiaries;
•
Certain cost-sharing waivers for emergency ambulance services furnished by stateor municipality-owned and operated ambulance services;
•
Certain remuneration between Medicare Advantage organizations and federally
qualified health centers pursuant to a written agreement; and
•
Drug discounts offered by manufacturers at the point of sale to beneficiaries under
the Medicare Coverage Gap Discount Program.
Further, the Proposed Rule would also make a technical correction to the safe harbor for
referral services in order to revert back to the language promulgated in the 1999 final rule,
which was inadvertently changed during subsequent revisions. The intent is to restore the
requirement that the payment amounts cannot be based on the volume or value of referrals
from either party to the other.5
Next Steps
Health care providers should consider whether the proposed transportation safe harbor
would be broad enough to protect any transportation services that they would like to offer to
their patients. Provider types that could be excluded from the definition of “Eligible Entity”
under the Proposed Rule should pay particular attention to this issue in their comments. The
OIG has signaled a willingness to craft this safe harbor in a way that will permit a variety of
types of transportation programs, as long as they pose a low risk to federal health care
programs, so the comment period is an opportunity for providers to help define this
exception. Comments to the Proposed Rule are due no later than 5 p.m. Eastern Standard
Time on December 2, 2014.
4
5
Id. at 59724.
42 C.F.R. § 1001.952(f) (emphasis added).
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A Possible Green Light for Patient Transportation Services:
OIG Proposes Revised Safe Harbors to the Anti-Kickback
Statute for Health Care Providers
Authors:
Amy O. Garrigues
amy.garrigues@klgates.com
+1.919.466.1275
Amy L. Mackin
amy.mackin@klgates.com
+1.919.466.1240
Kelsey U. Jernigan
kelsey.jernigan@klgates.com
+1.919.466.1113
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