• Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.

Free or Discounted Local Transportation Permitted under New Safe Harbor

A new safe harbor under the Anti-Kickback Statute ("AKS") permits providers to offer free or discounted transportation services to patients.  The safe harbor permits both direct transportation offered to individuals, and shuttle services that follow a regular route, subject to a number of conditions.

The conditions for the safe harbor resemble those set out in several recent OIG advisory opinions discussing providers' proposed transportation services to patients.  The key policy considerations are the level of risk that transportation will be used to recruit referrals, and the possibility that costs may be shifted onto federal health care programs.  These continue to be the primary concerns addressed in the Final Rule, effective January 6, 2017, that established the safe harbor.

Cost-shifting Prohibited

"Cost shifting" to federal or state health care programs, private payors or individuals is specifically prohibited by the safe harbor.  Transportation costs cannot be included on any Medicare cost report or any proposal to a federal health care program. The safe harbor extends only to exclude the value of transportation given to beneficiaries from prohibited "remuneration" under AKS, and does not protect the benefits that might inure to entities sharing the cost of that transportation.

OIG explains in the Final Rule that the cost-shifting prohibition does not prevent a third-party vendor who provides the services from bearing additional costs as a result of a free or discounted transportation service.  Donations may be solicited and accepted to support transportation services.  Of course, these permissions do not extend to permit any tie to referrals.  For example, providers are advised never to shift transportation costs to a local ambulance service, because asking for such an accommodation will always pose at least an implied threat of withholding future referrals, in OIG's view.

Other General Requirements

Only an "eligible entity" may offer or provide free or discounted transportation. The definition excludes individuals and entities that primarily supply health care items (including but not limited to DME or pharmaceuticals), or a family member or other agent of such a supplier.  At this time, providers of physical therapy and dialysis, Medicare Advantage organizations, Managed Care Organizations, and Accountable Care Organizations all may be "eligible entities."  OIG reasons that suppliers are more likely than providers to recruit beneficiaries through transportation.

All transportation must be provided in accordance with a policy of the eligible entity that provides non-discriminatory criteria for patients to access the services.  Those criteria may not limit services only to beneficiaries of federal health care programs, nor base the scope of the benefit on the anticipated volume or value of federal health care program business.  OIG would, however, permit a policy offering services to low-income patients, even if that had the effect of selecting more Medicaid beneficiaries.

No air, luxury, or ambulance-level transportation will qualify for the safe harbor.  The transportation services may not be marketed or advertised, nor may any health care items or services be marketed during the transportation.  Drivers and others arranging for transportation may not be paid on the basis of the number of beneficiaries transported.

Special Restrictions on Transportation for Individual Beneficiaries

Transportation offered to individual beneficiaries, as distinguished from shuttle services, must meet several additional criteria to qualify for the safe harbor.  Individual transportation services may only be offered to established patients of both the eligible entity (if that entity is a provider) and the provider or supplier to which the beneficiary is being transported.  New patients traveling to a first visit would not be included, and an eligible entity that is a provider must have a current, established-patient relationship with any beneficiary.  

Further, individual transportation must be for the purpose of obtaining medically necessary items or services.  The beneficiary must also be within 25 miles of the provider or supplier, or 50 miles if the patient resides in a rural area.  This phrasing appears to permit picking up a patient who lives more than 25 miles from the provider or supplier, so long as the pick-up is within the 25-mile radius.  The Final Rule indicates that it is permissible for an eligible entity to limit its offer of transportation to shorter distances, provided the purpose of the limit is not to promote referrals.

Shuttle Services

The safe harbor for shuttle services omits the requirements for established patients to be taken to medically necessary care.  The Final Rule indicates that a "shuttle" simply means a vehicle other than air, luxury and ambulance, which runs on a set route and set schedule.  

In the Final Rule, OIG discussed and rejected a requirement that unaffiliated providers must be included on the scheduled stops of a qualifying shuttle.  The prohibitions on marketing adequately address OIG's concern that a shuttle could be used to recruit patients.  The safe harbor accordingly only addresses the permitted range of transportation.  No stop on the shuttle route may be more than 25 miles from another shuttle stop at the premises of a provider of health care items or services.  The distance, however, may expand to 50 miles from shuttle stops located in a rural area.  

The option of providing free and discounted local transportation services may be of interest to many providers, including rural health care systems.  Some systems have seen their costs of care increase as a result of patients, often living at or near the poverty level, failing to access preventive services and regular care for chronic conditions.  The new safe harbor may provide a useful option to address these issues.

Thomas S. Dean
(Admitted in New York, Maine and New Mexico; Not admitted in Nebraska)

 

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500