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Fix Up the Hospital Van: OIG Proposes Transportation Safe Harbor; Clarification on ACA CMP Exception

on Tuesday, 11 November 2014 in Health Law Advisory: Zachary J. Buxton, Editor

On October 3, 2014, the Office of Inspector General of the Department of Health and Human Services (“OIG”) released a proposed rule expanding safe harbors under the anti-kickback statute and clarifying the exceptions to “remuneration” under the Civil Monetary Penalties (“CMP”)/beneficiary inducement laws. The proposed rules respond to longstanding concerns from health care organizations that are constantly trying to evolve and offer new types of programs and services to their communities. Key provisions of the proposed rule include: (1) a proposed safe harbor for free or discounted local transportation; and (2) clarification of when an item or service “promotes access to care” or presents a “low risk of harm” and is not, therefore, “remuneration” for purposes of the CMP/beneficiary inducement laws.

Local Transportation Safe-Harbor

Since 1991, the OIG has issued safe harbors that, if all of the requirements are met, protect certain activities from anti-kickback enforcement action, CMPs, and program exclusion. The OIG has considered adding a transportation safe harbor in the past, and industry stakeholders have long wondered about the permissibility of free or discount transportation programs. To this end, the OIG has issued several Advisory Opinions addressing the issue (AO 00-7, AO 09-01, AO 11-02). Requestors sought advice on issues including the types of transportation that may be offered, to whom services could be offered, the types of health care organizations that may offer transportation, and what is meant by “local” transportation. Another concern from providers is the $10/$50 “bright line” rule and the fact that many transportation options would not fit within such limits.

The proposed local transportation safe harbor would protect certain free and discounted local transportation if several conditions are met. The safe harbor would apply to transportation programs for established patients seeking medically necessary care at a health care organization.

Elements of the proposed safe harbor are straightforward and partially reflect previous guidance issued by the OIG in the transportation Advisory Opinions. First, it would apply to “Eligible Entities,” defined as any individual or entity, as long as they do not primarily supply health care items (e.g., durable medical equipment or pharmaceutical companies). The OIG is seeking comments on whether to exclude additional types of providers from safe harbor protection.

Next, transportation services may only be offered to established patients of the Eligible Entity. The OIG used the example of a patient who has selected an oncology practice and has attended an appointment. The physician could then offer transportation assistance to the patient who might otherwise have trouble attending a chemotherapy appointment. The safe harbor is not intended to be used for patient recruitment activities.

The OIG also proposed to extend protection to transportation services offered to individuals “involved in the patient’s care,” including friends, family, or other individuals. These companions, the OIG noted, can be beneficial or necessary to effective care and pose a low risk of fraud and abuse.

Additional components of the proposed safe harbor require the provision of services to be determined in a manner that does not consider the volume or value of referrals; services cannot include air, luxury, or ambulance-level transports; marketing and advertising of the program must be limited, but Eligible Entities could display a logo or name on the outside of the vehicle; Eligible Entities offering services must bear the total cost of the program; and services must be limited to a 25-mile radius, subject to some exceptions.

ACA Civil Monetary Penalty Exception – “Promotes Access to Care” and “Low Risk of Harm”

Another important piece of the OIG’s proposed rules includes clarification of the meaning of the phrases “promotes access to care” and “low risk of harm” in the context of CMP laws and beneficiary inducements. The CMP laws prohibit organizations from offering inducements (“remuneration”) that are likely to influence a beneficiary’s selection of providers, practitioners or suppliers. Section 6402 of the ACA excludes “any other remuneration which promotes access to care and poses a low risk of harm to patients and Federal health care programs [….]” from “remuneration” under the CMP statute. Even though this proposal is interpretive guidance and not a safe harbor, many health care organizations will welcome this statutory interpretation as they develop programs that offer items and services to federal health care program beneficiaries such as wellness regimens and care coordination.

First, the OIG would consider “promotes access to care” to mean “the remuneration provided improves a particular beneficiary’s ability to obtain medically necessary health care items and services.” “Low risk of harm” would mean the remuneration “(1) is unlikely to interfere with, or skew, clinical decision-making; (2) is unlikely to increase costs to Federal health care programs or beneficiaries through overutilization or inappropriate utilization; and (3) does not raise patient-safety or quality-of-care concerns.”

By way of example, the preamble discusses the contrast of items with the potential to assist individuals in their access to medically necessary care with valuable items or gifts. A cuff to monitor the blood pressure of a patient with peripheral artery disease is likely permissible because it is tailored to the patient’s condition and assists in that individual’s access to necessary health care by allowing the patient to record health data and report it to the provider. Conversely, an iPad mini provided to an emergency room “frequent flyer” to monitor and report on that patient’s condition is likely to promote access to care but may pose a significant risk to overutilization or inappropriate utilization, as these patients might seek or agree to unnecessary care and the provider might seek to order additional reimbursable items or services in order to recoup the costs of the item/gift provided.

In the proposed rules, the OIG also noted that, when analyzing any free or deeply discounted item or service provided to federal health care program beneficiaries, the CMP statute applies only to those items or services where an individual or organization “knows or should know [are] likely to influence [the Medicare or Medicaid beneficiary] to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may be made” by a federal healthcare program. This requires careful analysis, but does reinforce the idea that some items or services are simply so far removed from the beneficiary’s future decision on where to seek reimbursable items or services that the item/gift should not be considered “remuneration” at all.

The OIG also proposed revisions to two existing safe harbors – for referral services (§ 1001.952(f)) and cost-sharing waivers (§ 1001.952(k)), in addition to two new safe harbors as included in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and ACA. These two new safe harbors permit Medicare Advantage organizations to reimburse care provided by Federally Qualified Health Clinics at normal rates (proposed § 1001.952(z)) and the Medicare Coverage Gap Discount Program (proposed § 1001.952(aa)).

The OIG is seeking comments on all of the elements of the proposed safe harbors and the ACA clarification language. We expect that many health care organizations will comment with specific examples of proposed programs and ask for further guidance as to whether such programs would fit within a safe harbor or be excluded from the definition of “remuneration.” Comments are due to the OIG by December 2, 2014. We will continue to monitor this legislation and provide updates when the final rules are released.

Michael W. Chase

Zachary J. Buxton

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500