Summary of OIG Advisory Opinion 11-13 

On August 29, 2011, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued Advisory Opinion 11-13, addressing a proposed arrangement whereby a local governmental entity (County) providing emergency medical services (EMS) transportation would treat tax revenues from bona fide County residents as payment of cost-sharing amounts otherwise owed by such residents utilizing the EMS transportation to hospitals (Proposed Arrangement). OIG found that the Proposed Arrangement would not generate prohibited remuneration under the Anti-Kickback Statute (AKS) and accordingly, would not result in administrative sanctions.

The County provides EMS transportation through its fire department, and funds such transportation through taxes and per-service ambulance transport fees. Such fees are billed to patients and their insurers, including federal healthcare programs. Under the Proposed Arrangement, the County would not bill bona fide County residents who receive EMS transportation for cost-sharing amounts, but would accept payment from such residents' insurers, including federal healthcare programs, as payment in full for the EMS transportation to hospitals (a scenario generally referred to as "insurance only billing"). The County would treat revenues received from local taxes as payment of the cost-sharing amounts for County residents, but would continue to bill non-resident patients for cost-sharing amounts associated with their EMS transportation.

In its analysis of the Proposed Arrangement, OIG noted its long-standing concern regarding potentially abusive waivers of Medicare cost-sharing amounts, and that insurance-only billing could implicate AKS. OIG further noted, though, that the Centers for Medicare & Medicaid Services (CMS) has confirmed that the exception set forth in the CMS Benefit Policy Manual provision permitting state-owned or
-operated providers and suppliers to reduce or waive their charges for certain patients would apply to a state or municipal ambulance company that chooses to waive cost-sharing amounts for residents who require EMS transportation. (See Pub. 100-02 BPM Chap. 16, § 50.3.1). Consequently, OIG determined that it would not impose sanctions under AKS with respect to the Proposed Arrangement. OIG cautioned, however, that this CMS Manual provision applies only when the ambulance supplier is owned or operated by the government, and does not apply to the billing of outside providers pursuant to contracts that such providers might have with governmental units.

*The Fraud and Abuse Practice Group Leadership would like to thank Advisory Opinions Task Force members Heather Deixler, Esquire (Morgan Lewis & Bockius LLP, San Francisco, CA), and Joseph Kahn, Esquire (Nexsen Pruet PLLC, Raleigh, NC) for respectively writing and reviewing the summaries.