The OIG Advisory Opinion No. 12-11 warns ambulance providers that routine waiver of cost-sharing for emergency ambulance services may violate the federal Anti-kickback Statute.

Advisory Opinion No.12-11 was published by the HHS Office of Inspector General (OIG) on September 11, 2012, giving notice that the routine waiver of cost-sharing for emergency ambulance services by an ambulance provider could potentially violate the federal Anti-kickback Statute.

Facts

According to the facts from this Advisory Opinion, the ambulance provider requesting an opinion of the OIG operates in a service area where a majority of the emergency calls are responded to by volunteer first aid squads, who typically do not bill residents for costsharing amounts associated with emergency ambulance transports.

Under the proposed arrangement, the ambulance provider would enter into agreements with various municipalities in the service area to provide part-time emergency ambulance services. More specifically, the ambulance provider would be the primary ambulance provider for certain “scheduled blocks of time” when the volunteer first aid squads were unavailable (e.g., 8:00 a.m. to 4:00 p.m. on a specific weekday). The ambulance provider would bill Medicare and other third-party insurers for these transports, but, as a condition of participating in the arrangement with the municipalities, would be required to waive all cost-sharing amounts owed by the municipalities’ residents (a practice known as “insurance-only” billing).

Furthermore, the municipalities would not pay the ambulance provider the waived cost-sharing amounts on behalf of their residents.

The OIG concluded that such routine waiver of costsharing amounts may constitute prohibited remuneration to induce referrals, finding that under the proposed arrangement, the municipalities would be effectuating a routine waiver of cost-sharing amounts by (1) requiring the ambulance provider to bill residents “insurance only” and (2) not paying owed cost-sharing amounts on their residents’ behalf.

Advisory Opinion No. 12-11 versus Advisory Opinion No. 99-1

In its analysis, the OIG noted that in Advisory Opinion 99-1 (January 27, 1999), it had reviewed the waiver of copayments and deductibles by an entity that provided back-up emergency ambulance services in situations where no volunteer first aid squad was available to respond. In Advisory Opinion 99-1, the OIG found the arrangement did not violate the federal Anti-kickback Statute, because in that situation, the volunteer first aid squad was the primary provider of ambulance services at all times, with the private ambulance provider only providing back-up services in isolated and unanticipated circumstances, not on a scheduled basis.

In comparing the two Advisory Opinions, the OIG found that the private ambulance provider discussed in Advisory Opinion No. 12-11 would be serving as the primary provider of ambulance services during designated time slots, rather than the volunteer ambulance squad. According to the OIG, the proposed arrangement to provide emergency services on a scheduled basis as the primary provider of emergency ambulance services, even if only part-time, distinguished the facts of the proposed arrangements from those discussed in Advisory Opinion No. 99-1.

Please see Advisory Opinion No. 12-11 for more information.