On December 7, 2016, the Department of Health and Human Services Office of Inspector General (OIG) issued a long-awaited final rule establishing new Anti-Kickback Statute (AKS) safe harbor protections and codifying regulatory exceptions to the Civil Monetary Penalties Law (CMP).

Local Transportation Safe Harbor

This safe harbor protects local transportation made available by an “Eligible Entity” as long as the following conditions are met.  An “Eligible Entity” is any individual or entity, except for individuals or entities (or family members or others acting on their behalf) that primarily supply health care items (for example, durable medical equipment suppliers or pharmaceutical manufacturers).

  • The Eligible Entity must have a policy that is applied uniformly and consistently and transportation availability is not determined in a manner related to the past or anticipated volume or value of federal health care program business.
  • Transportation must not be provided by air, luxury, or ambulance-level transportation.
  • The free or discounted transportation cannot be publicly marketed or advertised; no marketing of health care items and services can occur during the course of the transportation or at any time by drivers; and drivers or others arranging for transportation cannot be paid on a per-beneficiary-transported basis (however, the OIG indicated that it would be permissible to identify the Eligible Entity on the vehicle for safety reasons).
  • If the Eligible Entity is a provider or supplier of health care items or services, the transportation can be provided only to Established Patients (and, if applicable, to the Established Patients of the provider/supplier to or from which the patient is to be transported). An “Established Patient” is someone who has selected and initiated contact to schedule an appointment or who has attended an appointment previously with the Eligible Entity.
  • The transportation is available only within 25 miles of the provider/supplier to or from which the patient is transported. If the provider/supplier is in a “rural” area, the limit extends to 50 miles.
  • The transportation is made available only for the purpose of obtaining medically necessary items and services, but the OIG also notes that transportation back to a patient’s home after receiving services would be protected.
  • The Eligible Entity bears the costs of the free or discounted local transportation and does not shift the burden onto federal health care programs, other payers, or individuals.

Shuttle Services

The Local Transportation safe harbor also establishes protection for shuttle services providing local transportation using a set schedule and route. Shuttle services must comply with all of the requirements described above, except they:

  • do not have to be operated in accordance with a policy that is applied uniformly and consistently (although implementation of a policy may be advisable from a risk perspective),
  • need not be limited to Established Patients (for example, employees and family members may utilize the shuttles), and
  • do not have to be provided for the sole purpose of obtaining medically necessary items and services.

A shuttle service will qualify as “local” transportation if there are no more than 25 miles (or up to 50 miles in rural areas) between any stop and any location where health care items/services are provided along the shuttle’s route.

Additional New Safe Harbors

The Final Rule recognizes additional new AKS safe harbors, including:

  • non-routine waivers of beneficiary cost-sharing amounts (copayments, coinsurance, or deductibles) owed to pharmacies under a federal health care program as long there is an individualized determination of financial need (or failure to collect after reasonable collection efforts) and the waivers are not marketed; and
  • remuneration between a federally qualified health center (FQHC) (or entity it controls) and a Medicare Advantage organization pursuant to a written agreement for services.

Beneficiary Inducements CMP

The CMP prohibits offering or transferring to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid-payable items or services. The Affordable Care Act (ACA) excepted “any other remuneration which promotes access to care and poses a low risk of harm to patients and federal health care programs” as well as the offer or transfer of items or services for free or less than fair market value (1) in the form of coupons, rebates, or other retailer reward programs or (2) based on financial need.

In the Final Rule, ACA the exception for promoting access to care applies to items or services that:

  • improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid and
  • pose a low risk of harm to Medicare and Medicaid and beneficiaries of those programs by
  • being unlikely to interfere with, or skew, clinical decision making;
  • being unlikely to increase costs to federal health care programs or beneficiaries through overutilization or inappropriate utilization; and
  • not raising patient safety or quality-of-care concerns.

The Final Rule also created regulatory exceptions to prohibited remuneration for the offer or transfer of items or services for free, or less than fair market value, by a person if either one of these conditions is met:

  • The items or services consist of coupons, rebates, or other rewards from a retailer; the items or services are offered or transferred on equal terms available to the general public, regardless of health insurance status; and the offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by the program under Medicare or Medicaid.


  • The items or services are not offered as part of any advertisement or solicitation; the offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by the program under Medicare or Medicaid; there is a reasonable connection between the items or services and the medical care of the individual; and the person provides the items or services after determining in good faith that the individual is in financial need.

The OIG also finalized regulatory exceptions to the definition of “remuneration” under the CMP for copayment reductions by hospitals for certain outpatient department services and, starting January 1, 2018, for waivers by a Part D Plan sponsor of any copayment for the first fill of a covered Part D drug that is a generic or authorized generic drug as long as such waivers are included in the benefit design package submitted to CMS.