OIG Finalizes Transportation Safe Harbor


Adrienne DresevicBy Adrienne Dresevic, Esq. of The Health Law Partners, P.C. 

The Office of Inspector General (OIG) has issued previous Advisory Opinions on the topic of transportation services (Advisory Opinions 09-01 and 11-02) which are further explained in an April 2011 Link article. Subject to certain safeguards, in those previous opinions the OIG determined that the proposed complimentary transportation arrangements did not pose a high risk for fraud, waste, and abuse.

The OIG’s most recent development on issues of transportation came in the form of a final rule released December 7, 2016, codifying new safe harbors to the Anti-Kickback Statute (AKS) and new exceptions to the beneficiary inducement provisions of the Civil Monetary Penalties law (CMP). The Final Rule went into effect on January 6, 2017; it creates new safe harbors to the AKS and new exceptions to the beneficiary inducement provisions of the CMP. This article focuses solely on the newly codified Local Transportation Safe Harbor.

By way of brief background, the safe harbor protects local, non-ambulance, non-luxury transportation provided to “existing patients” for the purpose of obtaining medically necessary services. Transportation may be provided on an as-needed basis or as a shuttle service. The Local Transportation Safe Harbor presents an opportunity for imaging providers and suppliers to provide assistance to ensure patients get to their appointments, provided the following requirements of the safe harbor are met:

  1. The availability of the transportation services is set forth in a policy that is applied uniformly and consistently and is not determined in a manner related to the past or anticipated volume or value of federal healthcare program business.
  2. The transportation is not provided via air, luxury, or ambulance-level transportation.
  3. The transportation is not publicly marketed or advertised, no marketing of healthcare items and services occurs during the course of the transportation or at any time by drivers, and drivers or others arranging for transportation are not paid on a per-beneficiary-transported basis.
  4. The eligible entity makes the free or discounted transportation available only to an individual who is an “established patient” of the eligible entity if the eligible entity is a provider/supplier of healthcare items/services and, if applicable, of the provider/supplier to or from which the patient is to be transported. The Final Rule defines an “established patient” as any person who has selected and initiated contact to schedule an appointment or who has previously attended an appointment with the provider/supplier in question. Thus, the safe harbor does not require that the patient already have attended an appointment with the entity; making initial contact satisfies the requirement.
  5. The eligible entity makes the free or discounted transportation available only within 25 miles of the provider/supplier to or from which the patient is transported, provided that, if the provider/supplier is in a “rural area,” the Final Rule extends that limit to 50 miles. The Final Rule defines “rural area” as any area that is not an “urban area” (an urban area is a Metropolitan Statistical Area or New England County Metropolitan Area, or the following New England counties: Litchfield County, CT; York County, ME; Sagadahoc County, ME; Merrimack County, NH; and Newport County, RI). This is consistent with the definition of “rural” in the Federal Stark law.
  6. The eligible entity makes the free or discounted transportation available only for the purpose of obtaining medically necessary items and services, although the Final Rule also affirms that transportation back to a patient’s home is protected.
  7. 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. “Eligible entity” includes any individual or entity, except for individuals or entities (or family members or others acting on their behalf) that primarily supply healthcare items (for example, durable medical equipment suppliers or pharmaceutical manufacturers). Thus, imaging providers and suppliers will be considered eligible entities qualifying for protection under the safe harbor.

The Final Rule separately establishes protection for shuttle services providing local transportation using a set schedule and route. Shuttle services must comply with all of the requirements described above, with exceptions: (1) shuttle services need not be operated in accordance with a policy that is applied uniformly and consistently, although implementation of such a policy may be advisable from a risk perspective, and (2) shuttle services need not be limited to “established patients” or for the sole purpose of obtaining medically necessary items and services (for example, employees and/or family-members may utilize the shuttles). A shuttle service must be local, however, and will qualify if there are no more than 25 miles between any stop and any location where healthcare items/services are provided along the shuttle’s route (up to 50 miles in rural areas).

The Local Transportation Safe Harbor will be beneficial for Medicare-enrolled entities to use when developing strategies for reducing the cost of care to patients. With the release of the Final Rule, imaging providers and suppliers that currently provide or are considering providing transportation service programs should consult counsel and/or carefully review the new guidelines to ensure they meet the new safe harbor requirements.


Adrienne Dresevic, Esq. is a Founding Shareholder of The Health Law Partners, P.C., a nationally recognized healthcare law firm with offices in Michigan and New York. Practicing in all areas of healthcare law, she devotes a substantial portion of her practice to providing clients with counsel and analysis regarding compliance, Stark Law, Anti-Kickback Statute, and compliance related issues. Ms. Dresevic serves on the American Bar Association Health Law Section’s Council, which serves as the voice of the national health law bar within the ABA. Ms. Dresevic also serves as the ABA Health Law Section’s Co-Chair of the Physicians Legal Issues Conference Committee, Vice Chair of the Programs Committee (Executive Leadership), and Vice Chair of the Sponsorship Committee. She is licensed to practice law in Michigan and New York. The author is a member of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or at adresevic@thehlp.com.

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