This summary of the recent the Anti-Kickback Statute (AKS) safe harbors and provisions of the Civil Monetary Penalties (CMP) law is provided by James B. Riley, Jr., JD, partner with the law firm of McGuireWoods in Chicago, and Jake A. Cilek, JD, also an attorney with McGuireWoods:

The revision provides safe harbor for free or discounted local transportation services provided to “established patients” by “eligible entities.” An “established patient” is defined under the new rules as “a person who has selected and initiated contact to schedule an appointment with a provider or supplier … or who previously has attended an appointment with the provider or supplier.” An “eligible entity” is essentially any healthcare provider except those that primarily supply healthcare items, such as durable medical equipment suppliers or pharmaceutical manufacturers, Riley and Cilek explain.

Riley notes that before the rule was finalized, OIG had received questions about patients who were not “established” but were choosing to go to the hospital for the first time. That is why the definition of “established” includes those who have initiated contact.

“The government expanded the definition of ‘eligible patient’ to say that if a patient calls the provider and elects to schedule an appointment, that person falls into the established patient category,” Riley says. “A number of questions like that from the proposed rule were addressed in the final rule.”

The transportation must meet the following conditions:

  • The availability of the transportation services is described in a policy not related to the past or anticipated volume or value of federal healthcare program business.
  • The transportation services are not provided via air, luxury, or ambulance-level transportation.
  • The transportation is not publicly marketed or advertised, and there is no marketing to patients during the trip.
  • Drivers or others arranging for transportation are not paid on a per-beneficiary-transported basis.
  • The transportation is made available only within 25 miles of the provider or supplier to or from which the patient would be transported, or within 50 miles if the patient resides in a “rural area.”
  • The eligible entity makes the free or discounted transportation available only for the purpose of obtaining medically necessary items and services. Round-trip transportation back to the patient’s home is allowed.
  • The eligible entity bears the costs of the free or discounted local transportation and does not shift the burden of such costs onto federal healthcare programs, other payers, or individuals.

The revised rule also provides a separate safe harbor for shuttle services that meet the conditions above, but HHS states that shuttle services do not have to be provided uniformly and consistently. Shuttle services also are not limited to established patients, meaning family members of a patient may ride the shuttle. However, shuttles must be local, defined as no more than 25 miles (or 50 miles in rural areas) away from the healthcare provider.

OIG also finalized a safe harbor to protect waivers and reductions for “emergency ambulance services” furnished by a Medicare Part B ambulance provider or supplier owned or operated by a state, a political subdivision of a state, or a tribal health program. A new safe harbor also protects discounts for “applicable drugs” furnished to an “applicable beneficiary,” as those terms are defined in the Medicare Coverage Gap Discount Program statute.

Changes to the CMP law include the implementation of ACA-mandated exceptions to the definition of “remuneration” that would not trigger application of the CMP law. The final rule exempts from the definition of remuneration under the CMP law “items or services that improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid, and pose a low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs.”

“Low risk of harm” items or services are defined as unlikely to interfere with, or skew, clinical decision-making; unlikely to increase costs to federal healthcare programs or beneficiaries through overutilization or inappropriate utilization; and not raising patient safety or quality-of-care concerns, the attorneys say.

OIG explains that items or services intended to help patients access care or make it convenient are covered by the safe harbor, but “inducements to comply with treatment or rewards for compliance with treatment” are not.

OIG also provides an exemption to the definition of “remuneration” for offers or transfers of items or services for free or below fair market value. If the provider determines in good faith that the individual is in financial need, the items or services can be provided free or below market value if they are not offered as part of any advertisement or solicitation, not tied to other services reimbursed under Medicare or a state healthcare program, and if there is a “reasonable connection” between the items or services and the medical care of the individual. Cash or instruments that can be converted into cash are excluded.