HHS-OIG published a new favorable advisory opinion on October 21, 2015 regarding free transportation services offered by an integrated health care system. Integrated health care systems continually seek ways to provide seamless, connected care to patients who may be using multiple providers for treatment of medical conditions. Free transportation is a potential way to ensure that patients attend their numerous appointments, but offering such a benefit without appropriate safeguards implicates the Anti-Kickback Statute (“AKS”) (42 U.S.C. § 1320a-7b(b)) or the Beneficiary Inducement Civil Monetary Penalty (“CMP”) Law (42 U.S.C. § 1320a-7a(a)(5)).
Advisory Opinion 15-13, largely reinforces the existing guidance that HHS-OIG has published on the subject of free transportation. We note that HHS-OIG released Advisory Opinion 15-13 even though it published a proposed rule in October 2014 that would specifically establish a new safe harbor for free or discounted local transportation services. Regardless, until a final rule describing a transportation safe harbor is available, Advisory Opinion 15-13 clarifies that arrangements where a health care system provides free transportation services to patients who see physicians with offices located on that health care system’s campus or at affiliated locations are acceptable under the applicable fraud and abuse laws, even if such physicians are not bona fide employees of the health care system. These arrangements will be permissible so long as the benefits of such free transportation services are “incidental” and do not serve to induce referrals to the non-employed physicians or influence beneficiaries to choose these non-employed physicians.
In Advisory Opinion 15-13, a 505-bed medical center, a 72-bed community hospital, and a multispecialty non-profit health care clinic (the “Requestors”) jointly requested that HHS-OIG analyze its proposal to offer free transportation services to existing patients to determine whether it would potentially violate the AKS or the Beneficiary Inducement CMP.
The Requestors, which are part of a rural integrated health care system (the “System”), sought to offer the transportation services to drive existing patients and individuals who accompany them using two routes among the Requestors’ facilities, as well as to a 55-bed community hospital and an ambulatory surgery center also forming part of the System. The maximum distance of the route circuit was approximately 18 miles. Based on the circumstances described by the Requestors, HHS-OIG assumed that the value of the transportation services exceeded nominal value (defined as $10 per transport or $50 in the aggregate for all transportation provided to a patient annually).
In concluding that the proposed transportation services presented only “a minimal risk of fraud and abuse under the [AKS] or the CMP,” HHS-OIG relied on factors largely corresponding to the facts to which the Requestors certified, including:
- the availability of the free transportation services to existing patients regardless of payor source or the anticipated volume or value of Federal health care program business for the System or its components;
- the non-ambulance, non-luxury nature of the transportation services;
- the absence of per-patient/per-transport compensation related to the transportation services;
- the local nature of the transportation services to address the limited availability of transportation options to the System facilities;
- the lack of public marketing of the transportation services or of any medical services as part of the transportation;
- the absence of cost-shifting of the free transportation services to other payors, providers, or individuals; and
- the unlikelihood that the free transportation services would subsidize the practices of the non-employed physicians practicing in System facility-based offices.
HHS-OIG’s conclusion that the benefits that the non-employed physicians would enjoy as a result of the free transportation would be “incidental” and that the transportation services did not appear to be to induce referrals to System facilities by these physicians is quite useful. Many integrated health care systems use a mix of provider types, some of which may not be employed by the system providing the free transportation services. Thus, the Advisory Opinion provides additional assurance that providers who are “on campus,” but who are not part of the integrated health system’s family of entities or direct employees may still participate in system-wide services provided to patients. Based on the continued consistency of HHS-OIG’s guidance on free transportation benefits, it is unlikely that a final rule setting forth criteria for a new transportation services safe harbor would roll back any of the agency’s past advice.