On October 3, 2014, the Office of the Inspector General for Health and Human Services (“OIG”) published a proposed rule that revises the Safe Harbor under the Anti-Kickback Statute concerning discounted or complimentary transportation services that medical providers can provide to patients.

See 79 Fed. Reg. 59717 (October 3, 2014).  Medical providers should welcome this much needed update, as the “nominal value” rule has declared many providers’ plans to provide complimentary transportation for their patients illegal.

In the past, the OIG declared that under the legislative intent of the Civil Monetary Penalties Law and the Anti-Kickback Statute, Congress intended that the statutes not preclude the provision of complimentary local transportation of “nominal value.”  The OIG has interpreted nominal value to mean no more than $10 per item or service or $50 in the aggregate over the course of a year.  Based upon persistent feedback, the OIG now believes this interpretation of nominal value may be overly restrictive as applied to complimentary or discounted transportation for patients.

The proposed safe harbor would protect free or discounted local transportation made available to established patients to obtain medically necessary items and services.

First, the proposed safe harbor would apply to “Eligible Entities.” The OIG suggests that Eligible Entities include medical providers, but it would not include entities that primarily supply health care items, such as durable medical equipment suppliers or pharmaceutical companies.  The OIG also suggests excluding home health care providers from “Eligible Entities” designation when providing transportation to or from their referral sources, such as doctors’ offices, while extending safe harbor protection when transporting patients to non-referral sources, such as pharmacies.

Next, the OIG seeks to limit safe harbor protection to “established” patients.  It offers as an example a patient who has already selected an oncology practice and has attended an appointment with a physician in the group.  The oncologist may offer discounted or free local transportation to this “established” patient, who may have trouble reliably attending appointments for chemotherapy.  By contrast, the safe harbor would not extend to a practice providing free or discounted transportation to new patients.

Under the proposed safe harbor, the entity would not be permitted to restrict the transportation service to patients sent from specific referral sources, nor could the entity require the patient to utilize the services of other referral sources of the entity.  The entity may set limits on the free or discounted transportation, but such limits must be unrelated to the volume or value of referrals.  Likewise, entities would not receive safe harbor protection if they limit the offer of free or discounted transportation only to patients prescribed expensive treatments versus inexpensive ones.

Providers considering offering free or discounted transportation services should contact health care counsel, who can submit comments on the provider’s behalf to the OIG with the goal of having the final rule most closely resemble the provider’s proposal.   Our healthcare law department stands ready to assist in this endeavor for any interested providers.