OIG Publishes Safe Harbor for the Provision of Local Transportation Services
From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.
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On December 7, 2016, the Office of Inspector General (OIG) published new safe harbor regulations, one of which provided safe harbor protection in connection with the provision of local transportation services. Although the terms are somewhat restrictive, the final regulation provides more flexibility than reflected by the criteria set out in the proposed regulation published on October 3, 2014.
Concerns about the provision of transportation services to patients have been raised since Congress enacted a provision in the 1996 HIPAA legislation known as the Medicare Beneficiary Inducement Prohibition. Since that time, the OIG has published a variety of Advisory Bulletins and Advisory Opinions addressing the provision of transportation services, addressing whether such conduct would violate the law. This final regulation reflects the most recent guidance.
It is important to recognize that, because of concern about the misuse of the safe harbor protections, the OIG tends to be very conservative in developing the criteria required to fall within a safe harbor, i.e., the criteria for safe harbor protection generally is very restrictive. Further, although it is always advantageous to meet all the criteria to benefit from safe harbor protection, failure to do so does not mean that such conduct violates the law; it simply means that the facts and circumstances of a particular arrangement must be considered on its own merits. Finally, while the provision of local transportation for patients has triggered concerns about violating the Beneficiary Inducement Prohibition, in the preamble to the new regulation, the OIG explains that meeting the provisions of the safe harbor provide protection from potential liability under the Anti-Kickback Statute as well as the Medicare Beneficiary Inducement Prohibition.
Provisions of the safe harbor
The safe harbor for local transportation contains the following five criteria, each of which must be met to achieve safe harbor protection:
1. The availability of the transportation services must be set forth in a policy that is applied uniformly to all patients, and is not determined in a manner related to the past or anticipated volume of federal health care program business;
2. The transportation services are not air, luxury, or ambulance level transportation;
3. The transportation services are not publicly marketed or advertised, and no marketing of health care items or services offered by the provider may occur during the transportation services;
4. Transportation is available only to an established patient for obtaining medically necessary services; for a patient who resides in an urban area, the transportation provided is limited to 25 miles, while for a patient who resides in a rural area, the limit is 50 miles; and
5. The provider of services bears all the cost of the transportation.
These five criteria are discussed in more detail below.
1. Transportation provided pursuant to a policy
The safe harbor requires that an entity providing transportation develop a policy that is applied uniformly and consistently, and is not determined in a manner related to the past or anticipated volume or value of federal health care program business. The preamble explains that this policy could identify specific criteria for patients eligible for transportation services, such as offering transportation services only to those patients who are otherwise not able to keep scheduled appointments, or to patients who are subjected to procedures that would make driving home difficult or dangerous. The OIG makes clear, however, that it is not imposing any limitations or restrictions on such a policy, as long as the policy is applied consistently to all patients, and is not determined in a manner related to the volume or value of federal health care program business.
2. Mode of transportation
The OIG specifically excluded from safe harbor protection any transportation by air, luxury vehicle, or ambulance. It acknowledged, however, that there may be certain instances where air transportation is, in fact, appropriate, but suggested that such situations would be better suited to review on a case-by-case basis under the OIG Advisory Opinion program.
3. Prohibition on marketing
To qualify for the safe harbor, an entity is prohibited from marketing to the public the availability of transportation services. According to the OIG, this prohibition extends to providing information about the availability of transportation services on websites or printed materials that are generally available to the public. Significantly, however, the OIG agreed that informing patients that transportation is available does not constitute marketing, if it is done in a “targeted manner.” The OIG specifically acknowledged that it would be permissible to ask a patient if the patient had a reliable mode of transportation in connection with scheduling a procedure that would require a safe ride home. Thus, if the availability of transportation services is not promoted to the public, but, instead, is addressed on a patient-by-patient basis, this provision of the safe harbor should be met.
As noted above, the OIG rejected suggestions from the public that it should be permissible for patients to receive information about other services offered by the provider during the transportation services. The OIG noted that “any discussion of the services that patients may receive should come from the health care provider or supplier, not the transportation provider.”
4. Established patient, medically necessary services and local transportation
In the proposed rule, the OIG had distinguished between new and established patients, and proposed to restrict the provision of transportation services only to established patients. In the proposed rule, the OIG defined an established patient as one who “had selected a provider or supplier and had attended an appointment with that provider or supplier.” Although qualification for protection under the final rule continues to be restricted to the provision of transportation services to established patients only, the OIG has significantly broadened the definition of established patient to include a patient who has selected and initiated contact with the provider or supplier to schedule an appointment. Thus, if the patient has taken the initiative to contact the provider, that patient qualifies as an established patient for the purposes of protection under the local transportation safe harbor.
Medically necessary services
In the proposed rule, the OIG solicited comments about whether protection under the safe harbor should be limited to transportation services related to the provision of medically necessary services. Despite comments supporting a more expansive purpose, the OIG declined to expand the purpose beyond medically necessary services. However, the OIG qualified its position by noting that it was restricting its position "at this time," suggesting that it would be open to expansion later.
The proposed rule would have restricted safe harbor protection to transportation up to 25 miles from the providers office. Recognizing the significant difference between rural and urban areas, the OIG has expanded the safe harbor protection to permit transportation up to 25 miles in urban areas, and 50 miles in rural areas. In the preamble, the OIG acknowledged that it had considered alternative approaches that were based on concepts other than distance, such as providing transportation to patients within the provider's primary service area. The OIG ultimately decided, however, to use the set mileage limits to avoid any uncertainty. Essentially, the OIG decided to use a "bright line" test, although it seemed to acknowledge that other options may not raise significant concerns of abuse.
5. No cost shifting
Finally, the regulation requires that the entity that provides the transportation services bear the cost of those services and prohibits shifting the burden of cost to any other federal health care program. Obviously, this issue arises in the context of institutional providers that file cost reports or provide data to the Medicare program relating to the cost of operation.
Finally, while not likely to be of relevance to physician practices, the final safe harbor regulation provided some modification of these criteria when transportation is provided using a shuttle service.
As noted above, safe harbor criteria are notoriously restrictive, as the OIG is concerned that some members of the provider community could abuse and misuse the protection offered. Compared with other safe harbors, however, the local transportation safe harbor appears to be reasonably balanced, and is consistent with the criteria of many of the programs that the OIG had reviewed and approved in a series of Advisory Opinions. One exception is in the definition of local transportation, where the OIG has retreated from accepting a provider's service area as the standard for local transportation, a position it had adopted in prior Advisory Opinions. Nevertheless, even though the OIG declined to use this criterion to qualify for safe harbor protection, the discussion in the preamble suggests that the OIG would acknowledge the reasonableness of such a criterion and, absent other concerns, would not likely find that such a standard would trigger a violation. Nevertheless, providers considering the use of other criteria may wish to avail themselves of the Advisory Opinion process to assure themselves of complete protection.
Alan E. Reider, JD, MPH, a partner at Arnold & Porter LLP, can be reached at email@example.com.
Allison W. Shuren, MSN, JD, a partner at Arnold & Porter LLP, can be reached at firstname.lastname@example.org.