OIG Opinion States Health System May Legally Provide Free Shuttle Service for Patients

Thursday, November 5, 2015
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

A medical center, a community hospital and a multi-specialty clinic comprising an integrated health care system (System) (collectively known as Requestors), requested an advisory opinion from the Office of Inspector General (OIG) about a plan to offer free shuttle service to patients of the System (Proposed Arrangement).  The OIG issued its opinion on October 14, 2015, concluding that the Proposed Arrangement could potentially implicate violations of the Anti-Kickback Statute (AKS), but it would not impose administrative sanctions on the Requestors for such an arrangement. 

Key Components of the Proposed Arrangement.

Several important factors that comprised the Proposed Arrangement and persuaded the OIG's favorable opinion include:

(a)    the cost of the shuttle service is to be fully borne by the System, and such costs would not shift to federal or state health care programs or other payers or individuals;

(b)    van drivers would be employed by the System and would not be paid on a per-patient or per-transport basis;

(c)    no marketing of health care items or services would occur during transport;

(d)    the vans would not be equipped or operated as ambulances and physicians, nurses or paramedic personnel would not accompany patients on the vans to provide treatment, medications or to monitor the patients;

(e)    shuttle service would not be advertised to the general public nor would it be publicized on any System website, restricting the service exclusively to current patients of the System; and

(f)    the availability of the shuttle service would not be connected in any way to the past or anticipated volume or value of federal health care program business of the System.  

It is important to note that three private physicians lease office space from the System, but they are not employed or compensated by the System, and they bill and collect payments for their professional services independently of the System.  These private physicians are not a part of the composite of Requestors.  

However, the OIG did not find any appearance of an attempt to defraud the government by way of illegal inducements of referrals to System facilities by these physicians, or an attempt to influence patients to choose these particular private physicians over other practitioners.  While the shuttle service would accommodate patients of these physicians in passing as well, any benefit derived by the private physicians of the Proposed Arrangement was found by the OIG to be purely incidental.

To read the full opinion of the OIG, click here

An Analysis of Potential Complications.

The OIG's opinion is limited by the facts and disclosures as presented by the Requestors in the Proposed Arrangement.  If the existence of any ancillary agreements or arrangements is later revealed by supplemental submissions (or other investigative means), the OIG's opinion could change.  

The Proposed Arrangement could potentially implicate AKS violations if the transportation is to be used as an inducement to federal health care program beneficiaries to obtain federally payable items or services of the System.  The AKS explicitly prohibits the knowledgeable and willful offering of payments, solicitations or receipt of remuneration in any form to induce referrals of items or services reimbursed by federal health care programs.  Not only can violations result in civil monetary penalties (CMP) against a person or corporation, but it constitutes a criminal offense as well punishable by further fines and up to and including imprisonment.  

To read one of our previous blogs regarding the result of alleged kickback schemes, click here

According to Section 1128A(a)(6) of the Social Security Act, further defines remuneration as "transfers of items or services for free or for other than fair market value."  Click here to read the full law.  The OIG has previously taken the stance that incentives of nominal value are not prohibited, where "nominal value" is defined as no more than $10 per item or $50 annually.  It is possible that the value of the transportation as outlined in the Proposed Arrangement could exceed these "nominal value" guidelines as set forth by the OIG.

However, after thorough analysis, the OIG maintained that the risk of fraud and abuse under the AKS and CMP  by the System by way of the Proposed Arrangement was minimal. 


Do you have any questions or concerns about what constitutes an illegal remuneration or possible violations of the Anti-Kickback Statute?

Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent health care providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S.  They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.


Martin, Catherine and Turcotte, Claire.  "Summary of OIG Advisory Opinion 15-13."  American Health Lawyers Association: 26 Oct. 2015.  Web.  27 Oct. 2015.

Demske, Gregory.  "OIG Advisory Opinion No. 15-13."  Office of Inspector GeneralDepartment of Health and Human Services: Issued 14 Oct. 2015.  Web.  3 Nov. 2015. 

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area.  www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
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