New Safe Harbor Allows for Provider-Sponsored Rides

Healthcare providers looking to coordinate transportation for patients who face barriers to care have expanded options thanks to a new government rule that was introduced just a few months ago. On December 7, 2016, the Office of the Inspector General at the U.S. Department of Health and Human Services (HHS) finalized a brand new safe harbor that allows healthcare providers to coordinate local transportation, of nominal value, for patients who meet pre-determined criteria. The new rules took effect on January 6, 2017.

While these rules are a welcome development for anyone who understands how transportation barriers impede access to care, this post explains important limitations and caveats of the rules, which are meant to prevent abuse and improper inducement of patient demand.

[Note: this post contains guidance based on our careful reading of the safe harbor. If you are a healthcare provider looking to establish a program for transportation, you should consult your general counsel to ensure that your intended use cases and funding methods are compliant.]

High-Level Rules

Transportation can only be provided to “established” patients, which is defined under the safe harbor as a patient who has received care from the provider before or has initiated contact, via a phone call or other means, to schedule a visit. This provision is meant to avoid the cases where transportation might be used as marketing to attract new patients to a practice or hospital. If a patient calls on their own initiative to schedule a consultation, and mentions transportation as a potential barrier, the provider may (on the basis of pre-determined eligibility criteria) decide to offer transportation to the patient.

The definition of “local transportation” is 25 miles in an urban area and 50 miles in a rural area, measured “as the crow flies.” This means that a healthcare facility should not offer subsidized transportation to patients who live outside of these distances, under the assumption that other, closer options are available for patients.

The definition for patient remuneration of “nominal value” has been increased to $15 per episode and $75 on an annual basis per patient. While there is ongoing debate within HHS as to whether these limits are low, providers should adhere to these guidelines with good faith and intent.

The safe harbor does not allow for air, luxury or ambulance-level non-emergency transportation, but does allow for transportation in standard vehicles, wheelchair-accessible vehicles and public transit. For example, if using an on-demand ride sharing service, the black car or luxury options would not be appropriate.

Important Caveats

Providers must define eligibility criteria for transportation assistance. These criteria are at the discretion of the provider, but must be applied consistently across all established patients without regard to a specific insurance program such as Medicare or Medicaid. For example, providers may not create a policy stating that all Medicaid or Medicare patients will receive transportation, as such a specification could be harmful to a federal health care program. Rather, eligibility may be determined on the basis of attested need, income level, health status, neighborhood, etc.

If one healthcare provider wants to offer transportation to other healthcare providers, that offer of transportation cannot be restricted to affiliated providers or providers within an integrated health system. Patient freedom of choice must be preserved. However, providers may establish limits on transportation to other providers such as distance (e.g. no more than a 10-mile radius) or type of provider (e.g. only primary care). For example, a hospital coordinating post-discharge care for a patient cannot “steer” the patient to an affiliated primary care provider by only offering a ride to certain providers. However, the hospital is allowed to offer transportation to post-discharge care as long as the patient was admitted to the hospital or received outpatient care there.

Many providers are interested to offer dedicated transportation to non-medical destinations such as a grocery store or housing office, but the safe harbor only protects transportation that is linked to necessary medical care. However, non-medical destinations may be included on fixed shuttle routes that a provider operates.

Payment Considerations

Providers should be aware that transportation provided by a private driver – whether through a traditional non-emergency medical transportation service or an on-demand ride share service – cannot be paid for on a per-patient basis, but may be paid on the basis of total distance traveled. For public transportation, patients can be reimbursed through a voucher, fare card or cash.

Importantly, the cost of free or discounted local transportation should not be shifted from a provider onto third-party payers or other funding sources. The exception to this rule is when there is an agreement among entities to share costs, such as a contract between a provider and third-party payer to cover the cost of transportation for health plan members. Such agreements should be entered into voluntarily and without any tie to referrals.

If you would like to discuss these new rules further, we would welcome your outreach via our form on the home page or at [email protected] We can help providers establish compliant, responsible, patient-centered, safe and cost-effective transportation programs.