United States: What You Need To Know About The AKS Proposed Local Transportation Safe Harbor

Last Updated: January 21 2015
Article by Amber McGraw Walsh, John C. Saran and Brett W. Barnett

On October 3, 2014, the Office of Inspector General of the U.S. Department of Health and Human Services ("OIG") published a proposed rule to expand the safe harbors and make other modifications applicable to the federal Anti-Kickback Statute ("AKS"). AKS makes individuals criminally liable for directly or indirectly soliciting, inducing, paying or receiving remuneration for referrals of services that can be reimbursed by a federal healthcare program (Medicare, Medicaid, etc.). It is one of the most utilized federal statutes by government agencies to scrutinize arrangements between healthcare providers.

Because the restrictions are very broad, the OIG created safe harbors for arrangements that it felt did not represent a risk of fraudulent abuse. Each element of a safe harbor must be met in order for a particular arrangement to escape further AKS analysis. In its release of this proposed rule, the OIG intended to update its stance on new arrangements and those arrangements that over time have proven to not be used for fraudulent purposes. The commentary period closed on December 2, 2014, with several healthcare and patient interest organizations applauding the introduction of the local transportation safe harbor, but also citing practical concerns for its limitations.

The Proposed Local Transportation Safe Harbor

The newly proposed local transportation safe harbor would protect free or discounted local transportation services to "established patients" by "Eligible Entities." Thus, if a healthcare provider complied with the safe harbor, then its practices also would be considered an exception to the definition of "remuneration." OIG proposed this safe harbor after being concerned that its prior interpretation of "nominal value" remuneration of $10 per item or service and $50 in the annual aggregate was overly restrictive in the context of complimentary transportation.

To qualify as an "established patient," the individual must have attended at least one appointment or used a certain service once before − in other words, new patients are not eligible for free or discounted transportation. An established patient may be accompanied by a family member or other person who is needed to assist the patient or who is involved in the patient's care. Furthermore, individual or entity healthcare providers are "Eligible Entities" if they primarily supply healthcare items and if the distance from the patient's location to the Eligible Entity to which the patient would be transported is no more than 25 miles. The OIG solicited comments on whether a more expansive service area should be allowed for rural and underserved areas. The OIG further requested comments on additional protections that could be implemented in the event a healthcare provider wants to arrange for transportation services to another provider, or a health system provides free transportation among various healthcare providers in a large network. Finally, the OIG considered whether to require Eligible Entities taking advantage of the safe harbor to maintain documentation on whether each patient has a financial or medical need for the services.

The Safe Harbor's Limitations

  1. Durable medical equipment suppliers, laboratories and pharmaceutical companies are excluded from the list of Eligible Entities, and the OIG is also considering excluding home health providers due to the high risk of using the transportation to steer increased use of services.
  2. Services would need to be offered to all established patients and not have strings attached, such as selection of particular providers.
  3. Transportation cannot be offered solely to patients who require frequent appointments or expensive treatment.
  4. Air, luxury and ambulance transportation are prohibited.
  5. Eligible Entities cannot market their transportation services or conduct marketing for healthcare services while providing such transportation; provided that signage on the vehicle naming the organization is not considered marketing.
  6. Eligible Entities cannot pay drivers or others involved in arranging the transportation on a per-beneficiary-transported basis, rather than an hourly or mileage basis.

Relevant Commentary

An overall recurring theme in the comments is that the "established patient" rule is overly prohibitive and could prevent groups of beneficiaries from receiving medical care. For instance, Cleveland Clinic explained that because of the size of its campus and the breadth of the population it serves, it has new or established patients, visitors and guests that rely on its shuttle buses for transportation. Similarly, Cleveland Clinic argued for the creation of eligibility criteria − such as illness, caretaker involvement, access to safe public transportation and lack of financial means for transportation − in case Eligible Entities decide to limit their local transportation program. UnitedHealth Group issued a similar comment, explaining that limiting the safe harbor to include only patients who have had face-to-face visits with healthcare providers would undermine the benefit of free transportation for beneficiaries who seek healthcare but who do not have the ability to see their providers for those initial visits. UnitedHealth Group explained that risks of inducement were mitigated since the beneficiaries have already been selected or have been assigned a provider.

Moreover, the American Medical Association pointed out that the term "established patient" is vague and confusing in non-physician office settings, as it is "unclear whether a patient would only need to visit the entity once or if a more established relationship is necessary." DaVita HealthCare Partners voiced similar concerns, asserting that the established patient rule must not be narrowly construed and should include a situation where a patient has a physician referral or order to another provider. However, DaVita supported the concept that an established patient has a documented financial or transportation-specific need for such complimentary transportation.

A second common concern the healthcare industry had with the proposed rule was the 25-mile travel limitation for local transportation. The AARP urged the adoption of "primary service area" travel distance, as opposed to the fixed mile limitation, to avoid precluding beneficiaries from seeking medical care in rural areas. The American Dental Association supported this view, explaining that in some parts of the United States, dental patients must travel in excess of 25 miles for access to care. Conversely, Adventist Health System indicated that it believed the 25-mile rule to be reasonable so long as there are exceptions for specific circumstances, such as for indigent patients who may need placement in a chemical dependence facility, skilled nursing unit or Veterans Affairs facility outside of the 25-mile radius.

Several commenters supported the inclusion of home health agencies in the definition of Eligible Entities, while UnitedHealth Group advocated for the inclusion of health plans in the definition of an Eligible Entity. UnitedHealth Group argued that health plans can improve clinical outcomes of their members through better care management, which would be bolstered by a coordinated local transportation policy.

It will be interesting to see how the OIG makes a cut on these concerns raised by these prominent healthcare and patient interest organizations, and we will follow any resulting final rule or guidance on this safe harbor. Regardless of the outcome, the OIG's broad solicitation of comments reflects a commitment to working with stakeholders to develop regulations that improve the access and delivery of care without inducing behavior harmful to the federal government payor programs. If you have any questions about this proposed local transportation safe harbor or AKS in general, please do not hesitate to contact one of us.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions