Free Transportation Services to Patients and Guests – When Is The Anti-Kickback Statute Violated?

Free Transportation Services and the Anti-kickback Statute

Advisory Opinions, Safe Harbors, and other Guidance

Free Transportation Safe HarborsIt is a fairly common practice for healthcare facilities, whether long term care facilities, hospitals, or large clinics, to offer free transportation services to patients and sometimes the visitors or guests of the patients. These arrangements require analysis under the Medicare Anti-Kickback Statute because a free service is being provided to the patient and could be viewed to at least partially be for the purpose of inducing the patient to seek services or for referral sources of these patients to refer them for services of the facility.

The OIG has viewed some arrangements where free or low cost transportation is provided to be a violation of the Anti-Kickback Statute and other arrangments to be permissible, even though arguably there is some element of remuneration to induce referrals. The OIG has issued advisory opinions that provide a great deal of guidance on the factors that the OIG will examine when determining which free transportation services are abusive and which will be permitted. Most recently, the OIG released a safe harbor provision that describes the conditions for safe harbor coverage of shuttle services and transportation of existing patients.

Failure to comply with a safe harbor does not necessarily mean that an arrangement violates the AKS. The advisory opinion that have been issued in this area are very instructive of the types of arrangements and various factors that the OIG considers to be suspect.

The particular case involved in the advisory opinion involved a skilled nursing facility that proposed offering local transportation to friends and family of nursing facility residents. The facility is located in an area that is not easy to access and requires payment of a $9 toll to cross a bridge. The service was to be provided uniformly regardless of income level or the source of payment for the residents’ care. There would be no charge for the transportation services and the cost would not be claimed on any Federal health program cost report. The value of the service to the families and friends of each patient is estimated to be over $50 per year. The facility did not plan to advertise the service broadly and advertising would be limited to its normal service area. A written policy would govern the operation of the transportation program.

The OIG found that the particular transportation arrangement would not violate the Anti-Kickback Statute.

The specific reasons given to approve this particular arrangement were (i) that the free transportation was not to assist patients to obtain care or for the benefit of referral sources to the facility, (ii) the program would be offered uniformly, regardless of the payment source for the services to the resident at the facility, (iii) the type of service is reasonable for the circumstances and is not a luxury item, (iv) the arrangement will only be offered and advertised locally and would not be used to expand the service area of the facility, (v) the marketing would be reasonably limited, (vi) local public transportation in the area is limited, (vii) the arrangement is consistent with the mission of providing quality care to patients, and (viii) the costs will not be claimed under any Federal health program.

These factors are instructive, and many are similar to the conditions in the recent safe harbor regulations. Circumstances that do not meet the safe harbor should be structured as close to the safe harbor as possible, but meeting the safe harbor completely is the only way to assure compliance short of requesting an advisory opinion. With all of the various guidance that has been issued in this area, together with the safe harbor regulations and comments, one can gain a very good understanding of the types of arrangements that will gain the disapproval of regulators.

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