BILLING BASICS: Think Twice Before Supplying Ambulance Backup

7 tips pull your restocking into safe harbor

If you're replenishing supplies for your volunteer rescue squad, be careful about whom you bill for the costs - anti-kickback guidelines say you could be treading on thin ice. Follow these seven foolproof tips to keep yourself on the OIG's good side.
Here's the situation: A hospital restocks the supplies used by volunteer rescue squads when transporting patients in emergencies. The rescue squads don't bill the patient or a third-party payer, and the hospital wants to bill the patient for the costs of the supplies. What's to be careful about?

Consult Advisory Opinions - At the Top
The HHS Office of Inspector General (OIG) loves to cut apart a scenario like the one above to uncover compliance issues - so much so that the agency has issued no less than four advisory opinions on the subject. Additionally, it has proposed "safe harbor" (also published) regulations to give you further guidance.
One compliant way the OIG suggests you set up the restocking arrangement: Have the ambulance supplier pay your facility the fair market value for the pharmaceuticals and supplies they acquire from you. Also, "have a commercially reasonable and appropriate remuneration arrangement in place - before anyone restocks," says Marc Goldstone, Esq., partner at Hoagland Longo in New Brunswick, N.J.
Stay in the Clear With These 7 Tips
Under the other safe harbor proposed by the OIG, ambulance suppliers could pay your facility nothing if you have the following criteria in place, Goldstone says:
Tip 1: Don't play favorites. You must restock all ambulance suppliers that bring patients to the hospital on an equal basis.
Tip 2: Connect with the community. The restocking arrangements you make must be:

  available to all ambulance suppliers and hospitals in the service area, 

  part of an effort to improve the EMS delivery system in this area, and

  overseen by a coordinating agency.
Tip 3: Make sure you have it on paper. Restocking arrangements must be in writing.

Tip 4: Watch where you send your bills. The hospital cannot bill under Medicare for the supplies used to restock the ambulances, or write off the costs for the drugs and supplies as bad debt.
Tip 5: No double-billing. Only your facility can submit the charge - the ambulance suppliers can't bill separately for the restocked drugs and supplies.
Tip 6: Prepare to answer to inspectors. Hospitals and ambulance suppliers must maintain records of the restocked drugs and supplies for HHS inspection.
Tip 7: Know the law. Hospitals and ambulance suppliers both need to comply with all other federal, state, and local laws regulating emergency medical care - so make sure [...]

- Published on 2005-02-12