Health Law Daily Transportation services coordination unlikely to result in fraud and abuse
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Wednesday, October 12, 2016

Transportation services coordination unlikely to result in fraud and abuse

By Kayla R. Bryant, J.D.

A proposed arrangement between two health care districts in which they would share the costs of hiring a transportation coordinator and subsidizing transport for some patients would have a sufficiently low risk of fraud and abuse. The HHS Office of Inspector General (OIG) reviewed the proposal and issued an advisory opinion stating that it would not impose administrative sanctions on the districts for pursuing this arrangement (OIG Advisory Opinion, No. 16-10, October 11, 2016).

Arrangement. District A is a local care district formed under state law, and in its proposal the district cites state code that gives it the power to provide assistance in the operation of facilities and services that benefit the patients in the district. District A owns and operates a hospital and Clinic 1, located across the street from each other in District A. It also owns and operates Clinic 2, located about 25 miles south in District B. District B does not operate health care facilities, but provides some health and wellness programs.

The districts propose establishing a transportation program to assist patients traveling between the hospital and Clinic 2. A transportation coordinator would build and maintain a database of transportation services provided by charities, contractors, and public entities. District A would pay for equipment and supply costs for the coordinator, and District B would pay for office space and utilities. The program would not be advertised, but offered to patients at Clinic 2 needing follow up hospital care. The transportation coordinator would individually tailor travel instruction to each patient’s needs. The districts would also provide travel vouchers for some patients who could not afford transportation, but these subsidies will be limited to transportation operated by the county.

Remuneration. The anti-kickback statute (AKS) (42 U.S.C. §1320a-7b) prohibits offering or receiving remuneration to induce or reward referrals of items or services that are paid for by a federal health care program. The OIG noted that the arrangement could result in two types of remuneration. First, between the districts, because B could be a referral source for A, since B does not operate health care facilities. The other type of remuneration could be given to patients, because they would receive the coordinator’s services and maybe a subsidy. However, the OIG found that the proposed arrangement would operate consistently with the districts’ mission to provide assistance to patients. The OIG will not impose administrative sanctions on the entities if they implement the proposed arrangement, but this opinion is limited only to the requestor and only to the terms of the arrangement presented.

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