Docs Can More Freely Transport Patients Under Updated Law

December 21, 2016

A new rule creates certain "safe harbor" provisions under the Federal Anti-Kickback Statute with regards to transportation.

Most physicians are generally familiar with the Federal Anti-Kickback Statute (the "AKS"),  Generally, the AKS prohibits the giving or receiving of remuneration (anything of value) in exchange for or to induce referrals for services and business payable by a federal healthcare program.  The Office of the Inspector General (OIG), however, has created certain "safe harbor" provisions and if an arrangement meets a relevant safe harbor, the arrangement is deemed not to violate the AKS. 

On Dec. 7, 2016, the Department of Health and Human Services' OIG issued a final rule creating additional "safe harbors" which are effective Jan. 6, 2017. The new provision in which physicians and physician practices are most likely to be interested is the "Shuttle Service and Local Transportation" safe harbor, which allows certain entities to provide free or discounted transportation upon meeting certain requirements. Individuals or entities that supply healthcare items (for example, durable medical equipment providers or pharmacies) are unable to take advantage of this safe harbor, but a physician office is eligible.

A physician or physician practice can offer shuttle-type service under the following circumstances:

• The shuttle is not determined to be a "luxury" or ambulance-level service;

• Availability is neither marketed nor advertised;

• No healthcare marketing is conducted during the transport;

• The shuttle driver is not paid on a per-person transported basis;

• The shuttle travels no more than 25 miles to its furthest stop (50 miles in rural areas); and

• The cost for shuttle service is not shifted to any federal payer.

In addition to these requirements, a physician practice can offer non-shuttle transportation service if it also meets the following:

• Maintains a uniformly-applied policy setting forth when transportation services are provided and unrelated to the volume or value of any healthcare business; and

• The transportation is provided only to established patients.

In the past, physician practices have avoided offering any transportation to patients for fear of being in violation of the AKS.  However, with careful planning, it may now be possible to assist eligible patients with their transport needs. Talk with your counsel if this is something your practice is interested in offering, or to find out if your current transportation program meets the safe harbor requirements.

Physicians should be aware that failure to meet a safe harbor provision under the AKS does not mean that the statute has necessarily been violated.  However, arrangements that do not meet a safe harbor will be subject to additional scrutiny in order to determine the parties' intent in entering into the arrangement, as well as potential risks to the federal healthcare programs posed by the arrangement.  Legal guidance is always recommended for any ventures that could implicate the AKS.