Labs Can Take Advantage of Transportation Anti-Kickback Safe Harbor

There are many benefits laboratories can't provide to beneficiaries or referral sources without violating the Anti-Kickback Statute. New changes to safe harbor regulations, however, allow labs to provide free transportation to Medicare beneficiaries under certain circumstances.

That's just one change affecting the Anti-Kickback safe harbors. Finalizing a proposed rule initially published in October 2014, the Office of Inspector General (OIG) revised the Anti-Kickback safe harbor regulations to afford "flexibility for providers and others to engage in health care business arrangements" that can "improve efficiency and access to quality care while protecting programs and patients from fraud and abuse." The main focus of the changes is to accommodate new health care delivery models in the age of value-based reimbursement systems and patient-centered care. Labs receive specific attention with regard to transportation in the final rule.

Safe harbor refresher
Safe harbors permit conduct that would otherwise likely violate the Anti-Kickback Statute. This protection is significant: as the OIG says in this final rule "[b]ecause of the broad reach of the statute, concern was expressed that some relatively innocuous commercial arrangements" could be subjected to prosecution as kickbacks. Violations of the Anti-Kickback Statute can subject the actor to felony charges, fines up to $25,000, imprisonment up to five years, imposition of civil monetary penalties, exclusion from participating in federal programs and False Claims Act liability. So Congress provided safe harbors and allows for them to be updated periodically to keep up with changing business practices and technology. Thus, this update. The OIG says it believes the changes "further the goals of access, quality, patient choice, appropriate utilization, and competition" yet avoid increasing costs, steering patients inappropriately or otherwise creating a risk that incentives will be tied to referrals. It also promises to continue to monitor the health care industry and consider future changes if needed to "foster high-quality, efficient, patient-centered care."

What's new in the final rule
Although the final rule does add some new safe harbors, it also incorporates changes into the safe harbor regulations that were included in already-enacted legislation. Here are highlights of what the rule does (see below for more detail):

• Incorporates into the safe harbor regulations the Anti-Kickback Statute exceptions included in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and the Patient Protection and Affordable Care Act (ACA)

• Addresses the exceptions to the civil monetary penalties (CMP) law's definition of "remuneration" that were included in the Balanced Budget Act of 1997 (BBA) and the ACA

• Makes technical corrections to existing regulations

• Adds new safe harbors to the Anti-Kickback Statute regulations

Labs permitted to offer transportation
The new transportation safe harbor allows labs and other providers to offer free or discounted local transportation services to federal program beneficiaries. Under this safe harbor, transportation programs may offer: a) Transportation to and from a patient's home to provide access for that patient to a provider or supplier; or b) Vouchers for such transportation provided by another entity.

Some limitations apply to free or discounted transportation:

• Transportation can't be luxury, air or ambulance-level service;

• The transportation can't be advertised or used as a marketing tool;

• Transportation policies can't be influenced by past or anticipated volume or value of federal program business;

• Health care services or items can't be advertised or marketed during the transportation or at any time by drivers;

• Drivers or others involved in arranging the transportation can't be compensated based on "per-beneficiary-transported basis";

• Only established patients can be provided free transportation services;

• If one provider is offering free or discounted transport to another provider, the patient must be an established patient of both the transporting and receiving provider;

• Transportation must be for the purpose of accessing medically necessary items and services;

• The entity making the transport possible bears the cost of the transport and can't shift the cost to federal programs, other payers or individuals;

• Distance for transportation is limited to 25 miles from the provider in urban areas and 50 miles from the provider in rural areas (Distance is measured "as the crow flies"—i.e., it includes any destination within the 25 mile radius from the provider);

• Suppliers of items are not eligible to provide such transportation benefits;

• If a hospital transports a patient to a laboratory (or other specialty provider), the patient must be able to choose the lab and the hospital can't condition the transport on the patient selecting a lab in the hospital's network; and

• Policies must be implemented to ensure the provider consistently and uniformly administers the transportation program.

Laboratories almost were precluded from relying on this safe harbor. In the proposed rule, the OIG solicited comments on whether transportation for laboratory services and home health services should be excluded from this safe harbor. The OIG had concerns that for those services such transportation was more likely to be offered in exchange for referrals. Ultimately, the OIG decided not to exclude laboratories or home health providers and only excludes suppliers of health care items (such as DME or pharmacy items).

Note that the rule requires free transportation only be offered to "established patients." The final rule explains, however, that established patients can include new patients who have contacted the provider to schedule an appointment. The eligibility trigger is that an initial appointment has been made. The key is that the patient has already chosen the provider, minimizing risk that free transportation service will influence provider selection. Thus, the patient doesn't have to have received health care services from the offering provider to be considered an established patient eligible for free transportation.

Finally, the safe harbor also allows eligible providers to offer shuttle services subject to most of the same criteria except that the shuttle must run on a set schedule and set route and shuttle schedules and stops can be posted without violating the no-marketing rule. Shuttles also aren't limited to providing access to medically necessary health care services or to transporting only established patients.

Takeaway: Revisions to Anti-Kickback safe harbor regulations recognize new legislation and provide flexibility for changing health care business practices.