Guidelines regarding APRNs prescribing Hydrocodone





In August, the U.S. Drug Enforcement Agency (“DEA”) published a final rule classifying Hydrocodone combination drugs as Scheduled II controlled substances.   Previously, Hydrocodone was listed as a Scheduled III controlled substance. Because of the specific provision in Kentucky law, Advanced Practice Registered Nurses (“APRN”) are permitted to continue to prescribe a 30 day supply of Scheduled II Hydrocodone combination products if allowed under their DEA license. KRS 218A.020(3) provides:

If any substance is designated, rescheduled, or deleted as a controlled substance under federal law and notice thereof is given to the Cabinet for Health and Family Services, the Cabinet for Health and Family Services may similarly control the substance under this chapter by regulation. If hydrocodone or any drug containing hydrocodone is rescheduled to Schedule II in this manner, the prescriptive authority existing on March 19, 2013, of any practitioner licensed under the laws of the Commonwealth to prescribe, dispense, or administer hydrocodone or drugs containing hydrocodone shall remain inviolate and shall continue to exist to the same extent as if those drugs had remained classified as Schedule III controlled substances.

According to the Kentucky Board of Nursing’s Guidance, “APRNs and Prescribing of Hydrocodone Combination Drugs”, “restrictions on prescribing pure Hydrocodone products designated as Scheduled II Controlled Substances prior to October 6, 2014 will remain Subject to Scheduled II prescriptive limits because the law in regard to these products has not changed.”

Prescription Drugs With A SyringeKentucky law permits APRNs to prescribe non-Scheduled as well as Scheduled drugs for their patients as long as practitioners adhere to all statutory and professional requirements, restrictions and accepted procedures. Under the current statute (KRS 314.011 §8, APRNs may prescribe a 30 day supply without refill for a Scheduled III controlled substance. “Any APRN who holds a DEA registration that does not allow prescribing of Scheduled II Controlled Substances will not be able to continue to prescribe Hydrocodone in any form after October 6, 2014, unless and until they obtain the appropriate authorization from the DEA.

Hydrocodone prescriptions written before October 6, 2014, and authorized to be filled or for refilling may be dispensed if such dispensing occurs before April 8, 2015. Hydrocodone combination prescriptions written on or after October 6, 2014 may not be refilled.

If things aren’t confusing enough, all Nurse Practitioners who are operating under a Collaborative Agreement for prescribing authority for controlled substances, should review that agreement to assure that the scope of prescribing is properly described. Because of the change in classification of Hydrodone combinations from a Scheduled III to a Scheduled II, these agreements must be carefully checked. Additionally, given the controversy surrounding APRN’s authority, it is suggested that the prescribing of Hydrocodone combination drugs be specifically outlined.

Additionally, another wrinkle relates in the wording of the statute itself. While the statute appears to apply only to those Nurse Practitioners who had prescriptive authority to prescribe Hydrocodone combination drugs on March 19, 2013, it could be argued that the statute covers the prescriptive authority for any Nurse Practitioner licensed under the law of the Commonwealth.

The Kentucky Board of Nursing has just published an APRN Alert for Butalbital prescribing. This Alert specifically states that “effective September 17, 2014 a prescriber without a DEA license cannot write or issue a prescription for a Butalbital containing product. (Fioricet, Bupap, Esgic, etc.)”   The Kentucky Board of Nursing goes farther to state that “any remaining refills on a Butalbital containing product prescription issued by a prescriber without a valid DEA license may not be dispensed. If a DEA licensed prescribed issued a prescription for a Butalbital containing product with refills and it has not been more than 6 months from the date written, it may be refilled.

Given the complicated state of the prescribing for Hydrocodone, it is advised that Nurse Practitioners check very carefully to assure that their prescribing is in keeping with both the DEA reclassification and their prescriptive authority under Kentucky law.

Gina M. Riddell, MPA, is a Research and Compliance Analyst of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Ms. Riddell concentrates her practice in healthcare law and is located in the firm’s Lexington office. She can be reached at  or at (859) 231-8780.

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On December 3, 2014, CMS issued its Final Rule that addresses provider enrollment. These new rules create new tools to police provider enrollment. CMS now has the ability to deny enrollment of providers, suppliers and owners who have been affiliated with an entity that has unpaid Medicare debt. CMS has announced that this provision will help prevent individuals and entities from incurring substantial Medicare debt, leaving the Medicare program, and then re-enrolling as a new business to avoid repayment of the outstanding Medicare debt. CMS has announced that it will only enroll eligible individuals or entities if they repay the debt or enter into a repayment plan.

  • CMS now has the ability to deny enrollment or revoke the billing privileges of a provider or supplier when a managing employee has been convicted of certain felony offenses.
  • CMS may now revoke billing privileges of providers and suppliers that have a pattern and/or practice of billing for services that do not meet Medicare requirements. This is intended to address providers and suppliers that regularly submit improper claims.
  • CMS also established a rule concerning when certain provider and supplier types, including ambulances, may bill for services prior to the date of their enrollment. Essentially, CMS has eliminated the ability to ambulance suppliers to bill for up to a year prior to enrollment in the Medicare program.

While the specifics of the new regulations are not yet available, it is significant now that CMS has created the power to deny enrollment to a provider with unpaid Medicare debt. Whether the provision addresses a provider that files bankruptcy and what the implications of bankruptcy may be have not been addressed.

What is clear is that CMS intends to use the Medicare enrollment process as an enforcement tool.

Lisa Hinkle




Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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Recently, the Office of Inspector General of the United States Department of Health and Human Services (“OIG”) released its Fiscal Year 2015 Work Plan summarizing its oversight and enforcement priorities for the 2015 Fiscal Year. Here are some highlights from the Work Plan.

Hospital-Related Policies and Practices

  • OIG will determine the impact of new inpatient admission criteria on hospital billing, Medicare payments, and beneficiary copayments. OIG will specifically examine hospital inpatient claims for compliance with the “two midnight policy”.
  • OIG will review data from Medicare cost reports and hospitals to identify salary amounts included in operating costs reported to and reimbursed by Medicare. Employee compensation may be included in allowable provider costs only to the extent that it represents reasonable compensation for managerial, administrative, professional and other services related to the operation of the facility and furnished in connection with patient care.
  • OIG will provide greater Medicare oversight of facilities claiming provider-based status to determine the extent to which provider-based facilities meet CMS’s regulatory criteria.
  • OIG will provide greater oversight of hospital privileging by determining how hospitals assess medical staff candidates before granting initial clinical privileges, including verification of credentialing and review of the National Practitioner Databank.


OIG will review the use of hospice general inpatient care and will assess the appropriateness of hospices’ general inpatient care claims and the content of election statements for hospice beneficiaries who receive general inpatient care. OIG also plans to review hospice medical records to address concerns that this level of hospice care is being misused.

Ambulance Services

OIG will examine Medicare claims data to assess the extent of questionable billing for ambulance services, such as transports that never occurred or potentially were medically unnecessary transports to dialysis facilities.

Sleep Disorder Clinics

OIG will examine Medicare payments to physicians, hospital outpatient departments, and independent diagnostic testing facilities for sleep-testing procedures to assess the appropriateness of Medicare payments for high-use sleep-testing procedures and determine whether they were in compliance with Medicare requirements.

Provider Eligibility

OIG will determine the extent to which and the way in which CMS and its contractors have implemented enhanced screening procedures for Medicare providers pursuant to Section 6401 of the Affordable Care Act. CMS is implementing new authorities that include site visits, fingerprinting, and background checks, as well as an automated screening process.

Adult Day Health Care Services

OIG will review Medicaid payments by States for adult day care services to determine whether providers complied with Federal and State requirements.

Health care providers should review their compliance policies and procedures in light of the Work Plan and identify any compliance vulnerabilities. The full Work Plan can be found on the OIG website,

Chris Shaughnessy





Christopher J. Shaughnessy is an attorney at McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Mr. Shaughnessy concentrates his practice area in health care law and is located in the firm’s Lexington office.  He can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law activities and does not constitute legal advice.

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Telehealth/Telemedicine: An Opportunity for Physicians and Providers to Add a New Line of Service

The cost effectiveness of providing health care via telemedicine or telehealth promises to be an effective tool to increase coverage and reimbursement of healthcare provided remotely or through telehealth. Towers Watson, a national consulting company, recently published a 2014 study that suggests that telemedicine could save $6 billion annually for the health care industry. “Achieving this savings requires a shift in patient and physician mindsets, health plan willingness to integrate and reimburse such services, and regulatory support in all states,” according to Dr. Allan Khoury, a senior consultant at Towers Watson.[1] Recent studies have assigned significant cost savings generated by telehealth use that include cost savings of $537 million per year for emergency departments using telehealth to reduce transfers and spending reductions of 7.7% to 13.3% per person per quarter in the cost of care for chronically ill Medicare beneficiaries using a health buddy via telehealth. [2] As the cost effectiveness of providing services via telehealth and telemedicine is proven, Medicare, most state Medicaid programs and commercial insurers are increasing coverage as well as reimbursement for telehealth services. State law requirements for providing telehealth and coverage differ greatly. Consequently, physicians and health care providers should be aware of the complexity of providing telehealth and its requirements, but should also incorporate telehealth services into their practices as a new way of providing services and a new line of business.

What is Telemedicine/Telehealth?

Simply defining telemedicine can be tricky, as there is no single definition. CMS defines “telemedicine” as the “provision of clinical services to patients by practitioners from a distance via electronic communications.”[3] The American Telemedicine Association (“ATA”), a nonprofit organization dedicated to integrating telemedicine into health care systems, defines it as “the use of medical information exchanged from one site to another via electronic communications to improve a patient’s clinical health status.”[4]

Mobile devicesIn April 2014, the Federation of State Medical Boards (“FSMB”) adopted a model telemedicine policy and defined “telemedicine” as “the practice of medicine using electronic communications, information technology or other means between a licensee in one location, and a patient in another location with or without an intervening healthcare provider.”[5] On the heels of the FSMB policy, the American Medical Association (“AMA”) approved “guiding principles” regarding telemedicine in June, but offered no single definition. The AMA report instead addresses telemedicine within three broad categories of telemedicine technologies: store-and-forward telemedicine, remote monitoring telemedicine, and real-time interactive telemedicine services.[6]

At the state level, Kentucky’s Medical Practice Act[7] defines telehealth as “the use of interactive audio, video, or other electronic media to deliver health care. It includes the use of electronic media for diagnosis, consultation, treatment, transfer of medical data and medical education.” Telehealth is often used as a synonym for telemedicine, but precise definitions, as evident from above, may differ.[8] Importantly, the Kentucky Board of Medical Licensure (“KBML”) has recently adopted a very helpful policy that accepts the FSMB’s model policy as the accepted and prevailing standard of practice for use of telehealth tools when practicing medicine. In a detailed opinion, the KBML recognizes that a patient/physician relationship via telehealth can be established with the informed consent of the patient, but includes complicated requirements for establishing the patient/physician relationship, obtaining informed consent, providing examination and treatment services, keeping medical records, maintaining patient privacy and prescribing. While recognizing prescribing via telemedicine to be at the professional discretion of the physician, the KBML emphatically points out that all requirements for prescribing whether in person or via telemedicine must be met and physicians will be held to the same standards for in-person prescribing when prescribing via telemedicine. While the opinion does not rule out prescribing controlled substances via telemedicine, all statutory and regulatory requirements must be met. The KBML’s policy specifically states that using an on-line tool alone is not sufficient for prescribing. Thus, Kentucky physicians have guidance from the KBML about telemedicine, but still must address issues like prescribing thoughtfully and carefully as there is no specific recipe for compliance with Kentucky’s prescribing requirements via telemedicine.

Technology News On Apple Ipad Air





It is also interesting and important to note what telemedicine may not be. According to CMS, telemedicine does not include phone calls, emails, images transmitted via fax, and text messages without the visualization of the patient.[9] On the other hand, the ATA has interpreted telemedicine to include transmission of an evaluative or therapeutic act through any means, method, device, or instrumentality, including emails and phone calls.

Contrary to its definition of what telemedicine is not, CMS has announced an important new benefit that will pay a monthly fee to physicians, nurse practitioners, physician assistants and others to manage the care of patients with two or more chronic conditions starting in January 2015 without face to face communication. Significantly, this new benefit will cover case/care management services for patients with chronic diseases without visualization of patients. To be provided efficiently, these services will require communication via telephone, secure messaging and email. Use of these telehealth tools, however, does not mean that CMS considers the services to be telehealth; consequently, these services do not have to meet Medicare’s telehealth regulatory requirements even though the services meet the ATA’s definition of telemedicine.

Getting Reimbursed for Telehealth Services

  1. Medicare and Medicaid

After a long period of indecision, Medicare announced final requirements for telehealth services in July 2014. To qualify for Medicare reimbursement of telehealth services, a beneficiary must be located in an area outside a metropolitan statistical area or in rural health professional shortage area (“HPSA”). In addition, Medicare “ will only pay for a face to face, interactive consultation service where the patient is present in an approved healthcare facility (hospitals, rural health clinics, skilled nursing facilities, physician offices and community mental health centers), known as an “originating site.” As a condition of payment, an interactive audio and video telecommunications system must be used that permits real-time communication between the provider at the distant site and the beneficiary at the originating site.

Professionals who may receive payment for covered Medicare services include physicians, physician assistants, nurse practitioners, nurse-midwives, clinical nurse specialists, clinical psychologists and clinical social workers, and dieticians or nutrition professionals. In July 2014, CMS released its CY 2015 Physician Fee Schedule which expands Medicare-reimbursable telehealth services to include remote medical services, psychological testing, psychotherapy, prolonged office visits, annual wellness check-ups and non-face-to-face chronic care management as well as psychiatric and behavioral health services. These are welcome changes and cover key areas that have, to date, not been reimbursable. Under the final rule, CMS added codes for psychoanalysis and family psychotherapy as well as codes that will allow mental health providers to report sessions that require more than the one hour visit. In addition, codes for the new management of chronic illness have been issued.

In July of 2013, Kentucky Medicaid issued final rules expanding the coverage of telemedicine services for Medicaid beneficiaries. Although providers are still limited to using only interactive video-conferencing to qualify for reimbursement under Kentucky’s new rules, Medicaid beneficiaries now have access to a broader list of providers and telemedicine services. It is important to note that Kentucky has statutory requirements that include approval of equipment by its telehealth network. Providers have reason to be hopeful about future policy changes that will expand Medicare and Medicaid payment for services provided through telemedicine

Commercial Insurers

While expansion of commercial coverage of telemedicine often depends on whether state law requires parity vis a vis other services, insurers are expanding telehealth coverage to reduce unnecessary costs including urgent care and emergency department visits. Quite simply, attractive cost savings will drive commercial insurers and employers to cover and provide more services via telemedicine. Insurers already often encourage members to access contracted providers to address questions via telephone or email. The expansion of these services to include evaluation and treatment appears logical. The same critical analysis must be undertaken by providers, insurers and managed care organizations alike to determine whether services may be provided under state law through telehealth as well as the requirements for how those services should be performed via telehealth. Issues to keep in mind include state laws addressing telehealth/telemedicine, requirements for equipment, state professional licensure laws and guidance, prescribing laws, location of the patient, privacy, security and confidentiality of medical records as well as other miscellaneous concerns.


Widespread adoption and use of telemedicine is inevitable; so, too, is the potential for noncompliance and a minefield of problems. The requirements outlined just a few of the issues that providers must keep in mind as they establish innovative and exciting telehealth services. Telehealth services are the way of the future and will change the how health care is provided. Providers who incorporate telehealth as a new line of service may have tremendous opportunities to increase reimbursement.

Lisa Hinkle






Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.



[1] Katie Wike, “Telemedicine Could Save $6 Billion Per Year” Health IT Outcomes (August 15, 2014)

[2] Laurence Baker Integrated Telehealth and Care Management Program for Medicare Beneficiaries with Chronic Disease Linked to savings, Health Affairs, September 2011.

[3] 76 Fed. Reg. 25553 (May 5, 2011).

[4] ATA, What Is Telemedicine?, available at

[5] Federation of State Med. Bds., “Model Policy for the Appropriate Use of Telemedicine Technologies in the Practice of Medicine (2014),” available at

[6] AMA, Report of the Council on Medical Service, Coverage of and Payment for Telemedicine, June 2014.

[7] KRS 311.550(17).

[8] See The Joint Commission, Hospital Accreditation Standards, Glossary (Oakbrook Terrace, IL 2013).

[9] 42 C.F.R. 410.78(a)(1),(3).

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The DOJ Increases Scrutiny of Whistleblower False Claims Act Suits

The Criminal Division of the Department of Justice (“DOJ”) recently announced that it will review all complaints filed under the qui tam provisions of the federal False Claims Act (“FCA”) to determine if a parallel criminal investigation is appropriate. This announcement came during a September 17, 2014 speech by the recently-confirmed Assistant Attorney General for the Criminal Division of the DOJ, Leslie Caldwell, at the Taxpayers Against Fraud Education Fund Conference in Washington D.C. This DOJ announcement signals a departure from prior policy, which allowed, but did not require, the Criminal Division to investigate Civil Division claims. In the past, the decision to open a criminal investigation was left to the discretion of each U.S. Attorney’s Office.

Now, the Civil Division of the DOJ will share all new qui tam complaints with the Criminal Division as soon as they are filed. This change in procedure will likely be detrimental for defendants in future qui tam cases. With the Criminal Division more involved in False Claims cases, settlements with the government may become more difficult due to the need for approval from both the Civil and Criminal Divisions. Defendants may also face increased pressure to accept settlement offers from the government to avoid high-risk criminal penalties.

In 2009, Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), to increase coordination and optimize criminal and civil enforcement.  This coordination yielded momentous results: the Department recovered $12.1 billion dollars under the False Claims Act from January 2009 through the end of the 2013 fiscal year.  Most of these recoveries relate to fraud against Medicare and Medicaid Programs. In fiscal year 2013 alone, the DOJ recovered $2.6 billion dollars for health care fraud violations and brought health care fraud-related prosecutions against 345 individuals.

Fraud Background Conceptual Design.




Thus, providers seeking reimbursement from federal programs should be aware that non-compliance risks have never been greater. Providers or entities faced with a civil qui tam suit should immediately evaluate their exposure to possible criminal charges. Because an ounce of prevention is worth a pound of cure, companies should closely review their compliance programs and pay special attention to the protocols in place to prevent and detect potential false claims or billing violations.

Emily Hord





Emily M. Hord is an Associate of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hord concentrates her practice in healthcare law and is located in the firm’s Lexington office. She can be reached at or at (859) 231-8780. 

This article is intended as a summary of newly enacted federal and state law and does not constitute legal advice.

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Kentucky Rural Health Clinics and FQHC’s/Look- A-Likes with Low Rates—Don’t Overlook this Rate Increase!

Approved by CMS and effective July 1, 2014, Kentucky’s Medicaid Program may now pay certain Rural Health Clinics (“RHC”), Federally Qualified Health Care Centers (“FQHC”) and Look-a-Likes a higher rate. The Department of Medicaid Services (“Medicaid”) sought approval to pay RHCs, FQHCs and Look-A-Likes that have a low per visit PPS rate at a rate equal to 125% of the Medicare rate.  This means that Kentucky RHCs, FQHCs and Look-A-Likes with low Medicaid rates, just got a raise– that is if they claim it! While the Medicaid State Health Plan Amendment provides that an “Alternative Payment Methodology” is now available, this really means that clinics with low rates can ask to be paid at a higher rate per visit without qualifying for a change in scope of service.   This increase in rate is supposed to be effective on July 1, 2014, but is based upon the Medicare Upper Payment Limit for RHCs as of September 30, 2014 and the rate as we calculate it is approximately $99.70. Essentially, this means that providers with rates below the $99.70 threshold may elect to be paid under the alternative payment methodology.

Interestingly, the same State Plan Amendment also made it more difficult for these providers to pursue an increase in its by claiming a change in scope of services that would justify re-calculation of the PPS rate. This Amendment makes clear that a change in hours, a change in location, or a renovation or new capital expense will not qualify as a change in scope of service and increase in the rate; only the addition of a covered service or increase in intensity of service will qualify for a change in scheap of dollars with stethoscopeope of services.




Medicaid has yet to issue any guidance about how to claim this increase and/or elect the alternative payment methodology, but is required to make the increase effective commencing July 1, 2014. This increase in rate, If properly claimed, will also increase the amount of supplemental or wrap payment that a RHC, FQHC, or Look-A-Like must be paid. Providers should carefully watch the amounts that are paid as supplemental/wrap payments by Medicaid and assure that they are paid the amounts that they are entitled to.   My suggestion is to claim this alternative payment methodology as quickly as possible. This will bring much needed financial relief to many underpaid providers that struggle to provide safety net services in underserved areas.

Lisa Hinkle





Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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Changes Proposed for Anti-Kickback Statute

It has been said before—healthcare is changing. Most often providers must adapt their practices to comply with governing regulations. Sometimes, governing regulations must be revised to adapt to providers practices. And on occasion, governing regulations must be revised to be consistent with other governing regulations. This is one of those occasions.

On October 3, 2014, the Office of Inspector General (“OIG”) published a Proposed Rule (“Rule”) that would make changes to the safe harbor regulations under the federal anti-kickback statute (“AKS”). Much of the Rule codifies changes to the AKS that were already established by the Affordable Care Act and the Medicare Modernization Act of 2003. It also, however, proposes two new safe harbors.

Codification of Pre-Existing Safe Harbors

Part D Cost-Sharing Waivers by Pharmacies: The Rule would protect certain cost-sharing waivers, including pharmacy waivers for financially needy Medicare Part D participants. Generally, cost-sharing waivers are prohibited by the AKS. To meet the safe harbor, pharmacies would need to meet three criteria: (1) the waiver/reduction is not advertised or part of a solicitation; (2) the pharmacy does not routinely wave cost-sharing; and (3) before waiving a cost-sharing obligation, the pharmacy determines in good faith that either the beneficiary has a financial need or the pharmacy fails to collect cost-sharing amounts after making a reasonable effort to do so.

Federally Qualified Health Centers and Medicare Advantage Organizations: This Rule would protect certain remuneration between federally qualified health centers and Medicare Advantage organizations pursuant to a written agreement requiring that the Medicare Advantage organization pay the contracting health center no less than the level and amount that the plan would pay for the same services to another type of entity.

Medicare Coverage Gap Discount Program: To implement another existing exemption in the AKS, one that was added in 2010 with the Affordable Care Act, the OIG would add a safe harbor protecting brand drug discounts provided by drug manufacturers to Part D enrollees in the coverage gap under the Medicare Coverage Gap Discount Program. The safe harbor would incorporate the definitions of “applicable beneficiary” and “applicable drug” which are set forth in the Affordable Care Act.

New Safe Harbors

Local Transportation: The OIG would establish a new safe harbor protecting free or discounted local transportation made available to patients by an eligible entity, provided that the following criteria are met: (1) the availability of the transportation services is not determined in a manner related to the past or anticipated volume or value of referrals; (2) the transportation does not take the form of air, luxury, or ambulance-level transportation; (3) the services are not marketed or advertised, no marketing of healthcare items and services occurs during the course of the transportation, and drivers or others arranging for the transportation are not paid on a per-beneficiary basis; (4) the eligible entity that makes the transportation available bears the costs of the transportation services and does not shift the burden onto other payors; and (5) the distance from the patient’s location to the provider is no more than 25 miles. Entities that supply health care items (such as pharmaceutical companies and durable medical equipment suppliers) and laboratories are excluded from the definition of “eligible entities.”

Cost-Sharing Waivers for Emergency Ambulance Services: This Rule would establish a safe harbor to protect reductions or waivers of cost-sharing amounts for emergency ambulance services furnished by providers owned by states or municipalities. Generally, items and services provided free of charge by a governmental entity are not reimbursable. The providers would be required to offer the reduction or waiver on a uniform basis, without regard to patient-specific factors. The OIG is also seeking an express prohibition against claiming the amount reduced or waived as bad debt for payment purposes under Medicare or a State health care program, or otherwise shifting the burden of the waiver to other payors.

Technical Correction

Finally, the Rule would also amend the existing safe harbor for referral services to clarify that the safe harbor precludes protection for payments from participants to referral services that are based on the volume or value of referrals to, or business otherwise generated by, either party for the other party. The “either party for the other party” language was inadvertently changed in a 2002 revision, but appeared in the 1999 Rule.

In addition to proposed changes to the AKS, the Rule also proposes changes to the civil monetary penalty rules. These changes would allow providers greater flexibility to enter into beneficial arrangements that are not in violation of the statute. The OIG is soliciting comments on how to best implement the changes. Comments on the Rule are due by December 2, 2014. If you are in the health care industry and would like more information contact a health care law attorney today.


Molly Lewis






Molly Nicol Lewis is an Associate of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Lewis concentrates her practice in healthcare law and is located in the firm’s Lexington office. She can be reached at or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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