Medicare Compliance & Reimbursement

Municipally-owned ambulance services can put in place "insurance only" billing arrangements, usually a major compliance red flag, without running afoul of the anti-kickback statute - but only if they structure their programs properly.

That's the message in the HHS Office of Inspector General's latest advisory opinion (No. 03-09), the most recent in a body of opinions that mark the terrain for waivers of ambulance copayments and deductibles. Released April 25, the opinion takes the measure of a fire district's proposal to treat local tax revenues as payment of otherwise applicable copays for residents of the area it serves.

Since the fire district is a political subdivision, it can operate under an insurance-only billing policy without breaking the anti-kickback law, the OIG says. The watchdog agency cites as its authority a section of the Centers for Medicare & Medicaid Services' carriers manual, which says a state or government "facility which ... charges patients only to the extent of their Medicare and other health insurance coverage, is not viewed as furnishing free services and may therefore receive program payment."

An added twist: While the OIG has dealt with this issue before in a number of advisory opinions (e.g., Nos. 01-10, 01-11, 01-12, 02-08 and 02-15), the new opinion charts some new territory. In addition to local residents, the CMS policy also applies to waivers of cost-sharing amounts for employees of local, taxpaying businesses who need ambulance services while at work.

As in past comments on the topic, the OIG warns that its analysis only applies to ambulance suppliers that are themselves political subdivisions - not to circumstances in which a municipality contracts with an outside ambulance service.

To see the opinion, go to http://oig.hhs.gov/fraud/docs/advisoryopinions/2003/ao0309.pdf.

Lesson Learned: Whether an ambulance service can establish "insurance only" billing policies without inviting kickback scrutiny depends on whether it's owned and operated by a state or political subdivision.