OIG OKs free transportation subject to conditions

The Department of Health and Human Services’ Office of Inspector General (OIG) determined last week that a hospital offering free transportation services to patients receiving extended courses of treatment does not violate the prohibition against inducements to beneficiaries as long as certain conditions are met.

Sandy Teplitzky, who heads the health care practice at the Baltimore-based law firm Ober Kaler, says he is encouraged by the OIG’s approach in this opinion. In short, he says it is another example of the OIG concluding that if the intent is bad, a transaction may violate the antikickback statute, but that, because of the protections included in the proposal, sanctions would not be imposed.

Andrew Josephs, vice president at Strategic Management Systems in Alexandria, VA, says the OIG typically does not look at arrangements strictly in terms of the financial ramifications of a potential kickback. He adds that it is important for compliance officers to understand that community benefit factors heavily in the OIG’s assessment of a potential kickback violation. "That is clear in this opinion," he asserts. "There is a substantial community benefit here for indigent patients that is not being advertised."

Josephs also points out that the hospital’s proposed agreement is not designed to bolster its position in the marketplace because it is the only hospital in a wide geographic area. "That is a consistent theme that can be taken from advisory opinions and applied to situations that may have a very different set of facts," he says.

"The opinion is very fact-specific," adds Teplitzky. "It does not approve all patient transportation services, but only those in the particular situation that met each of those elements." That means any hospital considering a patient transportation program should carefully examine each of the elements outlined by the OIG.

The OIG notes that many arrangements involving free transportation have important and beneficial effects on patient care. However, because these arrangements sometimes lead to inappropriate steering of patients, overutilization, and the provision of medically unnecessary services, they must be evaluated on a case-by-case basis that considers several risk factors including:

- The population to whom free transportation services is offered.

- The nature or type of free transportation services offered.

- The geographic area in which free transportation services are offered.

- The availability and affordability of alternate means of transportation.

- Whether free transportation services are marketed or advertised and, if so, how?

- The type of provider offering the free transportation services.

- Whether the costs of the free transportation services will be claimed directly or indirectly on any Federal health care program cost report or claim or otherwise shifted to any federal health care program.

Teplitzky also points out that in the regulations that were published under the incentives to beneficiaries provision, there was a reference to transportation. "That reference was considerably narrower than the type of proposal that was approved in this advisory opinion," he says.