“What’s the going rate for wheelchair transportation in New Jersey?”
The answer isn't as straightforward as you might think. Rates vary from company to company, but unfortunately, sometimes what really matters is, who’s asking? If you’re someone who handles regular referrals to ambulance companies, especially among Medicare patients, you’ve probably found that medical transportation company reps trip over themselves to offer you and your patients impossibly great deals. But if something looks too good to be true --- it probably is. So why do some companies do this?
In essence, they subsidize cheap rides with the proceeds from much higher-paying Medicare referrals.
By providing deeply discounted below-cost rates to high volume facilities like nursing homes and hospitals, some transportation companies are able to make under-the-table agreements to gain exclusive access to the more lucrative referrals. This is known as “swapping” and is a clear violation of the Anti-Kickback Statute of the False Claims Act, the federal government’s primary litigation tool in combating healthcare fraud.
Multiple ambulance companies have been prosecuted for these types of schemes, but recently, facilities have faced harsh financial sanctions as well. Despite the prosecutions, it’s still a fairly common practice in the industry. Hospital and medical facility staff members that we’ve talked to have witnessed companies offering wheelchair van trips for as little as $50 each way.
The Office of the Inspector General has long stated that:
Ambulance providers and health facilities risk violating the federal anti-kickback statue (the AKS) when they enter into agreements for discounted rates that are lower than the ambulance provider’s ‘total costs’ of rendering the transports.
Keep in mind:
The AKS makes it a criminal offense to knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services of the AKS. ‘Remuneration’ includes the transfer of anything of value, directly or indirectly, in cash or in kind. It has been interpreted to cover any arrangement where even ‘one purpose’ of the remuneration was to induce the referral of services.
A swapping scheme example:
An ambulance company representative meets with a transportation coordinator at a nursing home and promises wheelchair van and medical car rides for $50 each way. The transportation planner is skeptical and curious as to how that’s even possible, but knows that her facility will benefit from the cost savings associated with the discount, especially over the course of the year. The nursing home has many clients that need to go to doctor’s appointments by wheelchair van and medical car. But they also have many clients who, under Medicare, qualify for stretcher transportation in an ambulance. Because of the arrangement they’ve made with the wheelchair van trips, they now provide that same company with all referrals of the ambulance trips.
To the two parties involved, it seems like a mutually beneficial arrangement, but it hurts everyone in the long run. Along with the illegal swapping, when a dishonest ambulance company receives a Medicare referral, they might also bill for excessive and unnecessary services, resulting in fraudulent and wasteful spending. This puts a strain on our entire healthcare system and is a massive waste of taxpayer dollars.
Here at On Time, we do arrange lower rates with some of our facility partners based on high volume, but those rates are always above cost at an appropriate level.
Always remember: you get what you pay for. Here are just a few of the costs that go into wheelchair van transportation:
- Cost of purchasing vehicle
- Cost of vehicle maintenance
- Driver salaries
- Attendant salaries
- Support staff salaries (dispatchers, administrators, billing coordinators, customer service reps, mechanics)
- Vehicle insurance
- Malpractice insurance
- Staff training expenses
So our message to healthcare workers that do high volume medical transportation referrals is: ask yourself --- how low is too low?
Federal Anti-Kickback Statute explanation