OIG Proposes Rules on Free Transportation, Hospital Gainsharing, and Other Access to Care Arrangements

October 03, 2014

The proposed rule to give providers more protections to promote beneficiary access to care solicits significant industry input.

On October 2, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a proposed rule[1] to modify its Anti-Kickback Statute safe harbors and its Civil Monetary Penalty Law (CMPL) authority. Although much of the proposed rule simply incorporated safe harbor protections already established by exceptions Congress created in the Affordable Care Act, some 12 years after OIG began discussion of such changes, it has proposed a new safe harbor for free local transportation and CMPL protection for hospital gainsharing arrangements that seek to reduce costs that otherwise could be viewed as limiting or reducing care. Specifically, under the proposed free transportation safe harbor, free or discounted non-luxury transportation provided to “established patients” within 25 miles would be protected. The proposed safe harbor does have limitations for “Eligible Entities” that could qualify for these protections and proposes to carve out from that definition entities that primarily supply healthcare items (i.e., durable medical equipment suppliers and pharmaceutical companies). The proposed rule also solicits public comment on whether to carve out home health agencies from the definition of “Eligible Entities” with respect to the free transportation safe harbor.

OIG also proposes to revise the definition of “remuneration” in its CMPL to exclude payments that might otherwise violate beneficiary inducement and gainsharing statutory prohibitions. Recognizing that exceptions to the CMPL are intended to promote beneficiary engagement in their care and enhance care coordination among providers, and recognizing the significant recent changes in bona fide care coordination and cost-reduction initiatives as part of healthcare reform, OIG proposes to embrace a narrower interpretation of the phrase “reduce or limit services” in its gainsharing regulation. This could enable hospitals to implement objective, evidence-based protocols that increase quality and/or decrease cost, while allowing physicians at the hospital to share in the resulting savings. However, the proposed rule poses as many questions as it seeks to answer, soliciting comments on many aspects of the gainsharing proposal.

Although OIG may eventually promulgate a bright-line standard for free local transportation and hospital gainsharing, the proposed rule invites public comment on many unanswered questions, especially with regard to “promoting access to care” in relation to various care coordination and innovative initiatives. This will likely yield many comments that express many different viewpoints, and it may take months, if not years, for OIG to analyze the comments and finalize the proposals.


The Morgan Lewis Healthcare Practice is creating an in-depth analysis of the many facets of the OIG’s proposed rule in the upcoming weeks. In the interim, should you have any questions on the proposed rule, please contact any of the following Morgan Lewis lawyers:

Washington, D.C.
Howard J. Young
Jacob J. Harper

[1]. Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil Monetary Penalty Rules Regarding Beneficiary Inducements and Gainsharing, 79 Fed. Reg. 59,717 (proposed Oct. 3, 2014) (to be codified at 42 C.F.R. pts. 1001, 1003), available here.