Kusserow on Compliance: Free shuttle to medical facilities considered in OIG Advisory Opinion

In a recent Office of Inspector General (OIG) Advisory Opinion, the Requestor asked the OIG about a plan to offer free van shuttle service to certain medical facilities in an integrated health system (the “Proposed Arrangement”). Specifically, the Requestor wanted to know whether the service would constitute grounds for the imposition of sanctions under the Civil Monetary Penalty Law (CMPL) (42 U.S.C. § 1320a-7a) as well as the Anti-Kickback Statute (AKS) (42 U.S.C. § 1320a-7b).


The Requestor is an integrated health system (“System”) offering health care services to residents of a certain rural area; the Medical Center is the largest regional referral tertiary/quaternary care medical center in their area. Community Hospital A is a hospital located about ten miles away from the Medical Center. The Clinic operates a multispecialty group practice. Two other System components affected by the Proposed Arrangement are Community Hospital B, a hospital located approximately 16 miles away from the Medical Center, and an ambulatory surgical center (the “ASC”), located just over two miles from the Medical Center. All physicians practicing at the Medical Center, Community Hospital A, and the ASC are bona fide System employees. Some physicians working at Community Hospital B are bona fide System employees, while others are private practice physicians (the “Private Physicians”), who are not compensated by the System.


The communities served by the facilities have limited access to public transportation or affordable transportation creating a barrier to health care access for residents. The System proposes to offer a free van shuttle service between certain medical facilities run by the System and a “drop-off and pick-up” location in the center of the town primarily served by the facility. The purpose is to provide transportation for patients to be seen at any of the System facilities and for individuals who accompany patients to those visits. The transportation would be offered without regard for the patients’ health insurance status or their ability to pay for medical services. The vans would not be equipped or operated as ambulances and while on board the vans, patients would not be transported on stretchers nor would they be furnished any medications. No physicians, nurses, or paramedic personnel would travel in the vans to treat or monitor patients. The vans would be marked as belonging to the System and the drivers would be System employees with salaries and benefits. No payments would be paid on a per-patient or per-person-transported basis.

The OIG concluded that the Proposed Arrangement presents a minimal risk of fraud and abuse under the AKS or the CMP, because:

  • the availability of the shuttle service to patients would not be determined in a manner related to the past or anticipated volume or value of federal health care program business for the System or any of its components;
  • there would be no condition on patients’ use of specific items or services from the System or their selection of any other particular provider, practitioner, or supplier;
  • individuals would be transported without regard for their health insurance status or their ability to pay for medical services;
  • although the OIG has had long-standing concern with drivers offering beneficiaries free transportation to health care providers, and receiving compensation from those providers on a per-person or per-patient-transported basis, in this case these concerns were misplaced;
  • the service would be offered only locally, and therefore distinguishable from arrangements in which facilities offer free transportation to beneficiaries residing outside the facilities’ primary service areas in order to leapfrog competitor facilities and recruit beneficiaries from beyond the provider’s primary service areas; and
  • there would be no marketing or advertising to the general public.


Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.