OIG opinion: Free transportation doesn’t violate anti-kickback statute

The U.S. Department of Health and Human Services Office of Inspector General recently issued an opinion stating that a large healthcare system’s free van shuttle service for patients does not violate the federal anti-kickback statute. The statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a federal healthcare program.

The opinion was requested by a healthcare system described as being located in a rural area of the northeastern United States. The communities served by the facilities were said to have limited access to public transportation, constituting a barrier to healthcare access for its residents.

Under the arrangement being proposed, the healthcare system would offer a free van shuttle service between certain medical facilities run by the system, as well as a stop at a drop-off and pick-up location in the center of town. The service would run Monday through Thursday between 8 a.m. and 6 p.m. providing transportation for patients to be seen at any of the systems facilities, as well as anyone traveling with them.

The healthcare system requesting the opinion said that no marketing of services would take place during the course of transportation and that the drivers would be employees of the healthcare system and neither they, nor anyone arranging transportation, would be paid on a per-person transport basis. In addition, the healthcare system would bear the cost of the shuttle service and would not shift the burden of those costs onto Medicare, a state healthcare program, other payers, or individuals. In addition, the transportation system would not be advertised to the general public or publicized on any healthcare system website. Only existing patients would be notified.

The OIG noted that while the proposed arrangement had the potential to violate the anti-kickback statute and provide for the imposition of civil monetary penalties, in this case the healthcare system made it clear that the shuttle service would not be tied to the volume or value of business from those patients covered by government-funded healthcare programs.

“The proposed arrangement is therefore distinguishable from suspect arrangements in which free transportation is selectively offered to patients based on their diagnoses, conditions, treatments or type of insurance coverage,” the OIG wrote.

The OIG noted that the healthcare system wasn’t offering luxury vehicles or ambulances, which might be more valuable to the patient and therefore more likely to be an improper inducement. In addition, the drivers would not be paid on a per-person basis, a long-standing concern relating to problematic pay structures.

Given that the transportation circuit was limited to those living inside the healthcare system’s primary service area and that the service would not be advertised to the general public, the OIG felt that there was less of a risk that the service would be offered as an inducement for referrals.

Last year, OIG published a proposed rule that would amend the anti-kickback statute safe harbors, most notably to allow certain healthcare providers to offer free or discounted transportation services to their patients. The proposed safe harbor would permit “eligible entities” to provide free or discounted local transportation to established patients who are beneficiaries of federal healthcare programs to access medically necessary services. So far, that rule has not been finalized. Until such time that it is, healthcare facilities looking to provide free transportation must rely on advisory opinions such as this one.

Although advisory opinions are written for the individual requestor, similar providers may gain valuable insight into the OIG’s thinking by reading published opinions regarding a business model they are contemplating, or one that is already in place.

If you have any questions or concerns about your healthcare facilities’ business arrangements, please contact the Health Law Offices of Anthony C. Vitale for a consultation.

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The Health Law Offices of Anthony C. Vitale

The Health Law Offices of Anthony C. Vitale