OIG Releases Final Rule Revising Safe Harbor

Office of the Inspector General – Final Rule – Revisions to the Safe Harbors for Waiving Coinsurance, et.al

On December 7, 2016, the Office of the Inspector General published a Final Rule (81 Federal Register 88368) and will be effective January 6, 2017.

The Final Rule includes technical corrections to the existing Safe Harbor for referral services, a new Safe Harbor for waiver of patient cost-sharing for emergency ambulance services, a new Safe Harbor for free or discounted local transportation services, and an amendment to the definition of “remuneration” for purposes of the Civil Monetary penalties for beneficiary inducements.  Since the Final Rule covers many issues that pertain to other providers and suppliers, such as pharmacies, outpatient hospital, Federally Qualified Health Centers, Medicare Advantage Plans, etc., this Member Advisory will focus on the two issues that impact ambulance services and transportation.

Safe Harbor – Cost Sharing Reductions for Emergency Ambulance Services

In recent years, we have seen a number of OIG Advisory Opinions that permitted public EMS entities to waive the cost-sharing obligations of Medicare beneficiaries in specified circumstances. The OIG is now adding these as a “Safe Harbor”. The regulation, at 42 C.F.R 1001.952, will protect certain reductions or waivers of beneficiary cost-sharing for emergency ambulance services provided by public entities, which are paid by Federal health care programs under a fee-for-service basis. However, to qualify, all of the following must be met:

  • The provider or supplier must be owned and operated by a State, political division of a state or a tribal health program. NOTE: While this protects government entities that own and operate their ambulance service, it does not protect a supplier who contracts with that government entity even when that government entity pays the supplier for patient cost-sharing obligations through tax funded revenues.  It also does not protect hospitals providing the emergency ambulance services.
  • The emergency ambulance services must be provided by a Part B provider or supplier. The definition of “Emergency” is the same one listed in 42 C.F.R. 414.605, which you use to determine whether to bill for an emergency base rate or a non-emergency base rate.
  • The reduction or waiver is not considered furnishing free services paid directly or indirectly by a government entity. It is not considered a free service if the government entity bills to the extent of insurance.
  • The reduction or waiver of cost-sharing is offered uniformly without considering patient- specific factors. NOTE:  The OIG allows residency to be considered. Thus, a city may choose to waive or reduce cost-sharing for residents but not for non-residents.
  • The provider does not later claim the amount waived as a bad debt, or shift the burden to a government program.

If all of the above items are met, the government entity providing the emergency ambulance service can reduce or waive the patient’s cost-sharing obligation.

Please note, there is no change here with respect to membership programs by a public or private ambulance service, nor is there any change in policy or the law concerning a government entity paying a private ambulance company for copayments of its residents.

Safe Harbor for Free or Discounted Local Transportation

A new Safe Harbor has been created at 42 C.F.R. 1001.952(bb) to protect free or discounted local transportation made available by an “eligible entity” for beneficiaries of Federal health care programs.  The key elements to this Safe Harbor are:

  • The transportation must be local. That is defined as up to 25 miles if urban and up to 50 miles if rural.
  • It can be provided to or from a provider of service.
  • It can be provided to the patient as well as to a person that assists the patient.
  • The transportation does not have to be scheduled ahead of time.
  • The entity can use a voucher program, if they want.
  • The transport cannot be provided by an air, luxury or ambulance level service.
  • An eligible entity cannot require an ambulance company to provide free or discounted transportation to its patients.
  • An eligible entity is defined as an individual or entity.
  • An “established” patient means a person who has selected and initiated contact with a provider or supplier to schedule an appointment or who has given consent to someone to do it for them.
  • The transportation cannot be advertised.
  • The transportation cannot be used to recruit patients.
  • The transportation must be for medically necessary services.
  • Eligible entities must have an established policy regarding the availability of transportation assistance and must apply it uniformly.
  • The eligible entity is not required to maintain documentation for each patient transported, but it would be a “best practice” to have such documentation.
  • Drivers cannot be paid on a per patient basis.
  • The eligible entity cannot have a sign saying “Donated by ___”, as that is marketing.
  • The eligible entity cannot shift the cost of the transportation to any government health care program.
  • Shuttles are permitted but the rules are slightly less stringent. The vehicle must be used for a set route or schedule, does not have to be for established patients, must be for local use (25 miles urban; 50 miles rural), it can make multiple stops and, while the entity cannot advertise, they can post a schedule.

Read the entire Final Rule is 42 (Federal Register).

Office of Inspector General (OIG), Safe Harbor

David Werfel

David Werfel is a partner at Werfel & Werfel, PLLC.