March 29, 2011



I treat many patients with reduced mobility. I would like to provide free transportation for them. Can I do this?


Dr. A


Depends. Under certain circumstances the Office of the Inspector General ("OIG") may potentially identify free transportation as part of "fraudulent or abusive schemes that lead to inappropriate steering of patients, over-utilization, and the provision of medically unnecessary services." As part of its authority being responsible for protecting the integrity of federally funded healthplans, as well as the health and welfare of the beneficiaries of those programs, the OIG issues opinions identifying arrangements which may run afoul of applicable regulations.

In OIG Advisory Opinion No. 09-01, issued March 6, 2009, elements of a potentially abusive free transportation program were identified. Examples included:

  • Providers offering out-of-state patients free transportation to receive services at their facilities;
  • Van drivers soliciting, and offering free transportation services to, Medicaid patients for health care providers who compensate the drivers on a per patient or per service basis;
  • Providers offering patients free limousine services;
  • Hospitals or other providers inducing referrals from physicians by offering the physicians' patients free transportation to the physicians' offices or to a facility where the physician furnishes services.

The common theme of the examples above is potential for improper inducements for treatments. OIG is concerned about potential violations of the anti-kickback statute, which makes it a "criminal offense knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program." Social Security Act. s. 1128B(b).

In determining whether free transportation qualifies as a kick-back, OIG sets forth the following analytical factors it may consider, including whether:

  • Transportation offered in a manner related to referrals. Selection criteria related to the volume or value of Federal health care program business are suspect. Examples of suspect criteria include the selection of passengers based upon a diagnosis, condition, or treatment that might result in lucrative revenues to the offeror or selection based on a patients insurance coverage.
  • Luxury of specialized transportation is used, such as limousines, airline tickets, etc. raise greater concerns because such transports are more valuable to the recipient and therefore more likely to be an improper inducement.
  • Geographic area for transportation - where local is less suspect, and longer-distance is more valuable. Free transportation services offered to beneficiaries residing outside an offeror's primary service area are subject to abuse, particularly if the free transportation is used to expand the provider's historical service area.
  • Availability of other means of transportation - Free local transportation arrangements in areas lacking affordable alternative transportation are less likely to be vehicles for referrals.
  • Marketing and advertising was performed to promote free transportation - greater risk that the arrangement is being offered as an inducement for referrals where advertised.
  • Treatment of the costs of the free transportation. Costs of free transportation should be borne by the provider of the transportation. Arrangements that shift costs to Federal health care programs are suspect.
  • Offeror is also a provider of Federally payable items - there is increased risk that the provider could be using free transportation services to gain access to beneficiaries, potentially to provide services that are unnecessary or inappropriate.
  • Cost - Medicare's regulations are interpreted by OIG to allow inexpensive gifts and services "that have a retail value of no more than $10 individually, and no more than $50 in the aggregate annually per patient."

With the anti-kickback statute, there is oftentimes no bright line rule defining when an activity is potentially abusive, as is the case with free transportation. If your practice is providing or will be providing free transportation, I recommend that you consider the above elements and also seek the advice of a healthcare attorney to obtain a regulatory compliance review, especially as penalties for non-compliance may be severe (felony punishable by a maximum fine of $25,000, imprisonment up to five years, or both). Id.


For additional information on this topic, contact Jennifer Kirschenbaum at (516)-747-6700 ext. 302 or at


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