The Anti-Kickback Statute and NEMT: gifts, referral fees, and rider incentives

Most NEMT trips reach your board through someone else’s decision. A broker scheduler assigns them, a hospital case manager calls, a nursing home coordinator keeps you on a list, or a rider asks for your company by name. Federal law treats anything of value handed to any of those people in exchange for that decision as a potential kickback. Size earns no allowance: a two-van operator answers to the same statute as a hospital system.

This guide explains the two federal rules, the patterns investigators keep finding in transportation cases, and how to set up facility deals, sales pay, and rider perks that hold up. Use it as background for your own decisions, and have a health care attorney look at any referral arrangement before you sign it.

The two federal rules side by side

The Anti-Kickback Statute reaches anyone who pays or accepts value for referrals. The beneficiary inducement rule reaches gifts to Medicare and Medicaid members that are likely to sway which provider they pick. One arrangement can break both.

HHS raises the civil amounts for inflation in 45 CFR 102.3. The figures above come from the version amended January 28, 2026.

What makes a payment a kickback

Each of these five assumptions sounds reasonable, and the statute rejects every one of them.

OIG’s ambulance guidance lists one more consequence: exclusion from federal health care programs. Federal programs will not pay for services an excluded company furnishes, so for a provider built on Medicaid trips, exclusion takes away the core of the business.

What NEMT kickback cases look like

When HHS OIG gathered NEMT investigations from state Medicaid Fraud Control Units covering 2004 through 2006, the units reported 509 cases. Nineteen involved kickbacks, in three forms:

• Free rides for nursing homes, given to win the trips of their Medicaid residents
• Payments to members for using one particular transportation company
• Payments to people who influence which company members use, such as caseworkers, transportation coordinators at hospitals and nursing homes, and staff at dialysis and rehabilitation centers

Recent prosecutions follow the same lines.

• Paying members to book. On July 21, 2026, a man who owned one Long Island transportation company and co-owned another was sentenced to 97 months in prison, with forfeiture of more than $19 million. Prosecutors said that from about December 2020 until his arrest in June 2024, he and others paid Medicaid members to order rides through his companies. Members were steered to addiction treatment centers in New York City although Long Island had many, and the companies billed Medicaid more than $16 million for trips to three of those city centers.
• Drivers paying members. New York’s Attorney General announced on June 30, 2025 that a Bronx company would pay $4,775,869.61 to settle civil and criminal allegations. Some members admitted that drivers had paid them to request rides from it.
• Clinics paying drivers. On May 28, 2026, federal jurors in the Eastern District of New York convicted the office manager of several physical therapy clinics. The clinics paid ambulette drivers in cash to recruit Medicare patients, and Medicare paid the clinics more than $8 million between 2018 and 2020.

The billing schemes that tend to travel with kickbacks are covered in the NEMT fraud prevention guide.

When the offer comes to you

Money can flow toward a transportation company too, and the clinic case shows how. OIG counts a company running van or ambulette service as a possible source of business for doctors’ offices, diagnostic centers, and some senior centers. The ambulance guidance warns operators against taking gifts or benefits worth more than a token from anyone looking for those referrals.

Treat any money, meal, or favor from a destination as a warning sign. Take each rider to the address on the trip order, never to a location that rewards you for the drop-off. Have drivers report any offer to a manager the day it happens, and keep a written note of who offered what.

What you can give riders

Presents for riders are judged under the beneficiary inducement rule, and OIG has drawn a clear line. In a December 7, 2016 policy statement, it reads nominal value as a retail value of no more than $15 per item, and no more than $75 in total for each patient over a year. Gifts inside those limits need no exception. Cash and cash equivalents are excluded at any amount.

OIG’s final rule from the same day explains the term. A cash equivalent can be turned into cash, as a check can, or spent like cash, the way a debit card accepted anywhere can. A gift card limited to certain stores or to one purpose, like fuel, generally is not a cash equivalent, though it still counts toward the dollar limits. There is a limit: in a December 2020 advisory opinion (No. 20-08), OIG treated a card for a big-box store, one that stocks nearly every kind of product, as a cash equivalent.

Three cautions keep small gifts from becoming a loophole:

• Small is not safe under the kickback law. In that 2016 rule, OIG said the kickback statute makes no allowance for low-value items or services. A $10 card handed over in return for a referral is still a paid referral.
• Attendance rewards are not protected. 42 CFR 1003.110 exempts items that promote access to care and pose a low risk of harm. OIG explained that this covers tools that remove barriers to care, not incentives for seeking care, and that cash or cash equivalents are never low risk.
• States can go further. New York’s Medicaid transportation manual makes it illegal for a transportation provider to pay a member, or even offer to, in exchange for using its services. Pay includes anything of value, such as money, drugs, free or discounted personal transportation, or housing. The manual also forbids drivers and providers from asking members for payment.

Some examples, measured against those rules:

Selling to facilities without buying referrals

Facility business is legitimate when you win it on service and price. It turns into a kickback when value reaches the people choosing where riders go. OIG’s ambulance guidance lists hospitals, nursing facilities, assisted living facilities, home health agencies, physician offices, their staff, and patients among possible referral sources.

Three habits keep a facility account clean:

• Keep staff gifts to tokens. OIG considers occasional goodwill items such as logo key chains, mugs, or pens to be nominal. Event tickets, catered lunches, and gift cards for a discharge team go well beyond that.
• Price private work on its own merits. Some facilities buy certain rides themselves and also send you Medicaid riders. OIG warns that any connection, explicit or implicit, between the out-of-pocket price a purchaser gets and the federal program business it refers implicates the statute. Charge similar customers similar rates, and document how you arrived at the price.
• Take nothing back. Refuse money or favors from any destination for delivering riders to it.

A signed agreement makes all three easier to prove. See the facility transportation agreement template and the guide to winning facility contracts.

Facility-funded rides and the local transportation safe harbor

A hospital, clinic, or dialysis unit can offer its established patients rides at no charge or a reduced charge, and hire you to drive them, provided its program meets 42 CFR 1001.952(bb). The main conditions:

1. The facility’s policy defines who qualifies, and staff apply it the same way every time. Past or expected federal program business plays no part in who qualifies.
2. The rides are not air, luxury, or ambulance-level transport.
3. The facility does not publicly advertise the rides, nobody markets health care services during them, and drivers and arrangers are not paid per beneficiary carried.
4. The ride stays within 25 miles of the provider, or 75 miles for a patient who lives in a rural area. Neither limit applies when a patient goes home after an inpatient admission or after at least 24 hours in observation.
5. The facility pays the cost itself and does not pass it on to a federal program, another payer, or the patient.

Condition 3 shapes your invoice. OIG’s 2016 commentary says a facility that hires a private company cannot pay it per patient transported, but could pay on the total distance the vehicle travels. Bill these runs by the mile or at a flat rate, not per head. The guides to dialysis transportation contracts and hospital discharge transportation cover those accounts in more depth.

Paying the people who bring in business

Broker staff. Federal Medicaid rules require state broker contracts to bar transportation providers from offering a broker any kickback, rebate, cash, gift, or in-kind service meant to influence its referrals or subcontracting (42 CFR 440.170(a)(4)(ii)(C)). Provider agreements pass the ban down. The MTM provider agreement that Pennsylvania’s Department of Human Services posts (January 1, 2023 version), for example, has the provider promise it has paid no money and given no gifts to MTM staff or agents, and never will, “in exchange for favors in granting of transportation services.” More broker volume comes from acceptance and on-time performance, covered in getting more trips from NEMT brokers.

Your employees. The employee safe harbor at 42 CFR 1001.952(i) protects what a company pays its own bona fide employees for work on federally covered services, such as a driver’s or dispatcher’s wages. It borrows the payroll tax definition of employee, so it reaches W-2 staff and not independent contractors. Get a lawyer’s view before tying any bonus to new riders.

Outside marketers. A contractor’s pay is protected only under the personal services safe harbor at 42 CFR 1001.952(d), and only when every condition holds:

• A written agreement, signed by both sides, specifies and covers all the services for a term of one year or longer.
• The method for setting compensation is fixed in advance, consistent with fair market value, and ignores the number and value of federal program referrals flowing between the parties.
• The services are commercially reasonable in total and do not promote anything unlawful.

A commission per trip, a bonus per new Medicaid rider, or a cut of broker revenue fails the compensation test. A flat monthly retainer for defined outreach work can pass. The NEMT marketing guide covers outreach that needs no referral payments at all.

Directories and referral services. Under 42 CFR 1001.952(f), a referral service may charge participants only a fee assessed equally on all of them and based solely on its operating cost, not on referrals. It must also tell each person seeking a referral how it chooses providers and whether the provider paid a fee. A charge per referred rider falls outside the safe harbor.

When a deal does not fit a safe harbor

Safe harbors describe payment arrangements the regulations treat as lawful, and protection requires meeting every condition of one. Falling short does not make an arrangement illegal by itself. It means the arrangement is judged on its facts, and OIG’s guidance says the central question is whether the parties intend to pay, or be paid, for referrals.

For a proposed deal in a gray zone, OIG issues advisory opinions on request. Under 42 CFR 1008.53, only the parties who requested an opinion may rely on it. Another company’s favorable opinion does not cover your deal.

A kickback policy for a small NEMT company

1. Write it down. One page banning payments, gifts, and favors in exchange for referrals, given or received. Every owner, dispatcher, and driver signs it, and it goes into your policies and procedures manual.
2. Log gifts. Record every gift you give a rider or a referral source, noting what it cost at retail and the date, so you can show the totals stayed inside OIG’s limits.
3. Paper every facility deal. Price by mileage or a flat rate, match what similar customers pay, and keep the reasoning behind the number.
4. Pay marketers a fixed fee. Use a signed contract of a year or more, never a commission per trip or per rider.
5. Brief drivers on the hard limits. No cash to or from riders, no side money from destinations, no detours to distant clinics, and every offer reported the same day.
6. Screen people against the OIG exclusion list at hire and on a set schedule afterward.
7. Report what you see. HHS OIG takes tips at 1-800-HHS-TIPS and through its online form. Your broker should hear about it too.
8. Get counsel first. A health care attorney should see any new referral, marketing, or facility arrangement before anyone signs.

Trip records that answer the audit question

When an auditor questions where a rider went and when, the trip record is what you show. HealthRide records GPS miles and pickup and drop-off times on every trip, captures rider signatures on screen, and records each change made along the way. Reports exports the trip log on demand, and drivers work from the driver app rather than paper manifests.