Mid-Atlantic Health Law TOPICS

On January 6, 2017, a new safe harbor to the federal anti-kickback statute went into effect. The federal anti-kickback statute prohibits offering, paying, soliciting or receiving any remuneration given directly or indirectly, overtly or covertly, in cash or in kind, in return for patient, product or service referrals of business reimbursed through federal health care programs. 

Because the statute is broad and has the potential to prohibit innocuous or even beneficial commercial arrangements, there are numerous safe harbor provisions that describe various payment and business practices, which are not treated as offenses under the statute. 

The new safe harbor protects free or discounted local transportation services for federal health care program beneficiaries. To be protected under the new safe harbor, the following conditions must be met:

1. The transportation must be offered or provided by an “eligible entity,” which is defined as any individual or entity, except those that primarily supply health care items (for example, durable medical equipment suppliers and pharmacies);
    
2. The eligible entities must have a set policy regarding the availability of free or discounted local transportation assistance, which is applied uniformly and consistently, and availability is not determined in a manner related to the past or anticipated volume or value of federal health care program business;
    
3. The mode of transportation cannot include air, luxury or ambulance-level transportation;
    
4. The transportation assistance cannot be publicly advertised or marketed to patients or others who are potential referral sources, the marketing of health care items or services cannot occur during the course of the transportation, and drivers or others involved in arranging the transportation cannot be paid on a per-beneficiary-transported basis;
    
5. The eligible entity cannot shift the associated costs to Medicare, a state health care program, other payers or individuals; and
    
6. The distance traveled one-way cannot be more than 25 miles from the health care provider or supplier, or 50 miles if the patient resides in a rural area. 

The transportation does not need to be planned in advance, and providers who do not want to provide the transportation themselves can provide their patients with vouchers.  Moreover, the new safe harbor also permits shuttle services that run on a set route and on a set schedule, provided that the shuttle travels no more than 25 miles from any stop on the route to any stop where health care items or services are provided. 

Finally, providers should keep in mind that for all non-shuttle transportation services, the safe harbor only applies to transportation services provided to “established patients.” Patients are considered established after they select and initiate contact with a provider or supplier to schedule an appointment.

Barry Rosen
(410) 576-4224 • brosen@gfrlaw.com