On December 10, 2002, the OIG posted to its web site a letter clarifying its position regarding complimentary local transportation programs. Under the civil monetary penalty provision (CMP) against inducements to beneficiaries, 42 U.S.C. § 1320a-7a(a)(5), the letter was in response to an inquiry from a hospital about its existing program to provide the hospital's patients and their families with free transportation to the hospital and hospital-owned ambulatory surgical centers.

The OIG began its analysis by noting that free local transportation valued at no more than $10 per trip and $50 per patient is permissible under the CMP. However, complimentary transportation services that exceed such limits would implicate the CMP.

In an unusual step, the OIG indicated that it would not proceed against any existing complimentary local transportation programs that met the following conditions:

The program was in existence prior to August 30, 2002.
Transportation is offered uniformly and without charge or at reduced charges to all patients.
Transportation is only provided to and from the hospital or a hospital-owned ASC.
Transportation is only provided in the hospital's primary service area.
The costs of transportation are not claimed directly or indirectly on any cost reports.
The transportation does not include ambulance transportation.

Although the letter specifically addressed hospital transportation programs, our understanding is that the OIG will be undertaking a broad review of transportation programs involving all types of health care providers, not just hospitals.

The OIG stated that the moratorium would remain in effect until it either promulgated a final rule on the subject or indicated its intention not to proceed with such an exception. Meanwhile, in a solicitation for suggestions for safe harbors under the CMP for beneficiary inducement, the OIG sought specific comments regarding exceptions for complimentary local transportation programs. 67 Fed. Reg. 72,893 (Dec. 9, 2002).

The OIG's letter is unusual in that it establishes a temporary moratorium on enforcement actions under the OIG's CMP authority. Health care providers who currently have complimentary local transportation programs or are considering developing such programs should watch for future guidance from the OIG.